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The only word that comes to mind is "suicidal"... not because they're trying to take on the NYT, but because it's an ad-supported site turning away relevant traffic. I don't get it.
The implictions of this case would be enormous, if they were to prevail against the NYT. It would mean that scraping, mashups, "meta" sites would also come under review.

I just don't see a court turning back the tide of technology in favor of this small company - especially given the fact that the NYT subsid (boston.com) included the name of the source next to all of the links - and only one or two sentences of text from the articles.

How different is this from what Google does when you run a search - in the search results they also serve up one or two lines of descriptive text scraped from each site. Google News too.

I just don't see this happening. I think your choice of the word suicidal is appropriate.