This has been asked and answered numerous times here, lets not have to go over this again. PadMapper was using CL data without a license, they are not 'reading it' they are republishing it in their own app.
Well, since you've clearly been over this more carefully than most of us, maybe you could be troubled just a bit to elaborate on these questions one more time:
* Is it clear that the kind of data that craigslist published can in fact be "owned"? Because no matter what their terms claim, the legal analyses I've read aren't positively conclusive.
* Why is what Padmapper did any different than a search engine? Contrary to some assertions, PadMapper was not republishing listings wholesale -- they published digests (making the ownership issue even less tenable) along with hyperlinks, which sounds a lot like a search engine to me (pretty much what they are). Or even a typical anchor tag itself: the contents of such a tag are generally a digest, the attribute presents the hypertext.
* If you agree these activities are something people shouldn't be able to do without permission, are you fine with a web where search indexing or even linking is essentially by agreement only? This is not an academic question, btw -- there have been lawsuits over linking: http://www.salon.com/1999/08/12/deep_links/
But that data doesn't belong to Craigslist. To the extent it's copyrightable at all, it belongs to the user who posted each ad. And even then, PadMapper only reproduced a minimal number of facts on its website: price, location, subject line, number of bedrooms, whether cats/dogs are okay. They linked to CL for the full ad, so no copyright was infringed.
2. One cannot "steal" publicly accessible data.
3. A search interface with resulting links to the relevant post on CL; if PadMapper was a "competitor" then so is google.