It leaves it still uncertain as to whether an opt-out system could ultimately be acceptable in its eyes. It seems extremely difficult to imagine what new form the Settlement could take that would satisfy Google's business objectives and the Government's requirements.
Meanwhile Google is sitting on millions of unauthorized scans of books and continuing to use them to return results in Google Book Search. While this litigation has been trundling on over the last five years, Google's scanner has not been turned off. The scale of the copyright infringement has ballooned. Although it is heartening that the US government has rejected the Settlement, it seems intensely problematic that leaving the possibility of a resolution open could leave rightsholders in a virtually perpetual limbo while Google keeps its foot pressed down hard on the infringement accelerator.