(they actually were, but stopped doing so once I pointed out the facts to them.)
I know of two further sites where SmartFrame is being used to stop people "stealing" out-of-copyright images, and to label them as protected by copyright.
This is simply a land-grab, attempting to enclose the (digital) commons.
There's also the fact that, for images that do remain in copyright, there are exceptions in law allowing reuse for study, review, parody etc.
In recent years, the BL have worked closely with Wikipedians to share media under free/ open licences, including over a million images on Flickr Commons, and releasing audio recordings of birds, to which they own the copyright. I've worked with them on both projects. They also employed a Wikipedian in Residence for a year, and generously hosted a Wikipedia conference and other Wikipedia events.