Fairey has referred to what he does as “referencing.” There’s certainly plenty of precedent for making reference to older artwork in new ones. How does one distinguish between plagiarism and reference?

The process of looking back at the past is very accepted in our business—the difference is when you take something without adding anything to the conversation. We celebrate influence in the arts, we think it’s important and essential.  But imitation we have some ambivalence about, especially because it involves property rights. It probably has something to do with the nature of capitalism. We know that in other cultures, Chinese culture for instance, imitation is seen as a tribute, because you wouldn’t bother imitating trivial works. But in those cases the influence is acknowledged and the skill required is obvious.

For myself—this is subjective—I find the relationship between Fairey’s work and his sources discomforting. Nothing substantial has been added. In my own case, when I did the Dylan poster, I acknowledged using Duchamp’s profile as an influence.  I think unless you’re modifying it and making it your own, you’re on very tenuous ground.  It’s a dangerous example for students, if they see that appropriating people’s work is the path to success. Simply reproducing the work of others robs you of your imagination and form-making abilities. You’re not developing the muscularity you need to invent your own ideas. 

http://www.printmag.com/design_articles/MiltonGlaseronShepardFairey/tabid/492/Default.aspx