I need to read some other articles on this I guess.
I would think that Google is INDEXING the books, and not GIVING AWAY the whole books for free? Probably they are providing searchability and displaying a SMALL PORTION of the book, which would fall under Fair Use laws I would assume. As to the artist's paintings... which artists don't display small pictures of their art on their own sites? If Google can index and display previews of them that way, why would this be any different really? No one buys a NOVEL for the illustrations anyway.
I think Google provides a method for having something removed from their index, anyway. If you don't want the extra attention that comes from Google indexing your art, then follow the process to have it removed.
They are just looking for a pay day, when the voluminous attention they get from being able to be found on Google in the first place, would probably bring more business, and outweigh, some miniscule royalty check anyway.
Maybe I'm missing something?