Re-Mix or Plagiarism?

So there's this teenage chick in Germany who "wrote" a book and was hailed as a genius-brilliant-awesome author. She was short-listed for a frou-frou writing award and fast-tracked to fame and fortune. There's only one problem. Apparently, she plagiarized big old chunks of text (including entire pages) from someone else's book. (Here's the New York Times article with the details: http://www.nytimes.com/2010/02/12/world/europe/12germany.html?partner=rss&emc=rss)

The thing that makes this an unusual case of plagiarism is that after she was caught, she totally owned the fact that she hadn't written every word of the book as original prose, but claimed that artistic mixing was an artform in and of itself among the youth culture in Berlin. Like re-mix DJs and visual artists who do derivative art. (Which begs the question why she didn't site her sources in the first place if the art was in the mixing and not the writing, but I'm not gonna get into that.)

On the surface, remixing a book isn't that different from Pride and Prejudice & Zombies. Except Jane Austen's work is in the public domain and Jane Austen was very obviously credited as a collaborator. I'm inclined to think this German madchen is in the wrong since she only came up with the "re-mix" excuse after she got caught, but I'm not as certain how I feel about the concept of literary remixing as a whole.

Plot themes get repeated, heroic archetypes have been reused since the Greeks, but when the actual words are being "borrowed" that seems ethically squishy to me - at least if you're calling yourself a writer. Call yourself a word-DJ and I'm fine with that, but I don't think DJs should be allowed to win Grammys in the same category as singer/songwriters, so neither should word-DJs be considered writers. And they should be required to cite the sources they're remixing.

But even then, the concept makes me a little nervous. Is this going to preserve our literary culture for future generations or dilute it until we don't even remember what the classics were before they were mixed?