Copyright is reserved unless explicitly given. That is, what you have said may be perfectly true, and Arrington could still be in the wrong. All they have to have done is to not give him explicit permission.
Practically speaking, he is not in the wrong at all. What exactly do you think Simon&Schuster can do, sue him? Can you imagine going up to a federal judge and seeking an injunction for infringement for a guy who posted excerpts of a book that were already online? What exactly are the damages?
And I'm surprised so many here seem to be getting this wrong. Copyright law is very important for anyone interested in the software business to understand.