This is the state of the game industry. There is no reason why it should change. Did a company get beat to a market by a similar game? Yes, but that happens everyday in this industry. We don't need added protection through copyright or patents. We just need to suck it up and do what we do best and make games.
Certainly, patents and copyright are brute force applied to the delicate matter of ethics and shouldn't be a consideration. But if the fear of getting cloned before you can get your game to market makes developers more afraid to release their work before it's finished, are we missing out? Would their games be as good if they didn't get the chance to publicly explore them with prototypes first? Would they be able to attract the same followings if the first thing the market knows about the game is the finished, paid-for article?
Uh, we didn't link to the Portal: No Escape short film yesterday because we we waiting for the release of the second part of the Half-Life 2-inspired Escape From City 17 to provide a nice counterpoint. Yes, that's it. Anyway, they're both excellent – and, incredibly, Escape From City 17 only cost $250 to make.
And here's a wedding proposal via Portal 2 level design. A really good one.