From what I know from my experience in the biz, it may not really have Graham and Adam's "approval", but I'd bet it's perfectly legal and that the details of this release were worked out between them all in advance. Crabbi lost money, dPulse lost money, they all wasted a whole bunch of time (both theirs and ours) and that everyone will probably profit a little bit based on prior legal arrangements and signed pieces of paper that would have covered an original VE release. Again, just guessing, but I'd have to assume that this entire arrangement had to have been worked out at the time the decision was made to kill the VE project so it could be renamed PWEI.
Ultimately, releasing as PWEI is the best decision from a marketing stance. Nobody knew who Vile Evils were (except the die-hard fans who managed to keep up on PWEI news for 17 years since the last album... so they will never ever know that VE is related to PWEI and will never buy the album.
I may not totally like the idea of buying the "unofficial" (which isn't even the right word for it) version of this material, I'm going to get it, if for nothing more than to add it to my collection.
I can't imagine any problems with delivery or quality after myself and two others from these forums have ordered the "Arrives Boxed" set from them and received them quickly and trouble free. The guys at dPulse were very honest with me about how badly they screwed the pooch on the first round of VE orders and seemed truly regretful of pissing off so many people... they wish they could have done everything differently. I am NOT defending them, just letting bygones be bygones and taking current actions at face value.
P.S. I love how far this thread has traveled off it's original intent.