Chryssy has an interesting post about not simply a copyright infringement but also an abuse from a site that benefits from selling derivative Hello Kitty works in the form of destruction, crucifixtion and so on.

It brought about an interesting thought, about a site like that, that abuses and tortures Hello Kitty and sells the merchandize as such (obviously unlicensed I suspect) vs. something like Kittyhell which, although not flattering to Kitty either, is clearly satirical and in some way comical and describes an experience.

Read her blog to find out more but I think it raises an interesting debte overall. I generally support her position, I just think it is an interesting area to explore also.