No one likes to burn bridges, even if they get sued. They could do a "this is how google would look if you go through with this" day, but for now they look to be taking the more safe route with lawyers.
So, in other words, the posters defending Google are being totally disingenuous when they claim that Google couldn't care less about these petulant little publishers and that the publishers need Google far more than vice versa. Apparently, Google really doesn't want to take these publishers off Google News.