Status: personal view only. Editing status: not perfect. Lawyer website.
Axioms of Web Architecture
Myth: "A normal link is an incitement to copy the linked document in a way which infringes copyright".
This is a serious misunderstanding. The ability to refer to a document (or a person or any thing else) is in general a fundamental right of free speech to the same extent that speech is free. Making the reference with a hypertext link is more efficient but changes nothing else.
When the "speech" itself is illegal, whether or not it contains hypertext links, then its illegality should not be affected by the fact that it is in electronic form.
Users and information providers and lawyers have to share this convention. If they do not, people will be frightened to make links for fear of legal implications. I received a mail message asking for "permission" to link to our site. I refused as I insisted that permission was not needed.
Myth: Making a link to a document makes your document more valuable and therefore is a right you should pay".
This is another dangerous one. It is of course true that your document is made more valuable by links to high quality relevant other documents. A review in a consumer magazine has added value because of the quality of the products to which it refers the reader. I may be more valuable to you as a person if I refer you to other people by name, phone number or URL. This doesn't mean I owe those people something.
Myth: Making a link to someone's publicly readable document is an infringement of privacy.
The "security by obscurity" method of hiding things behind secret URLs has the property that anyone knowing the URL (like a password) can pass it on. This is only a breach of confidentiality of there is some confidentiality agreement which as been made.
Hall of Flame
Famous cases in which people tried to prevent others linking to their web pages include, if I recall correctly, Ticketmaster trying to stop the Seattle Sidewalk site linking into its pages, so that those looking through the site about the town could follow a link and buy tickets to the events. This was widely perceived not only as philosophically wrong by falling for the myths above, but also crazy, as it was a protest against Seattle Sidewalk bring traffic and hence business to the Ticketmaster site.
In 2002, A Danish court made an injunction preventing a Danish news filtering service (effectively a sort of search engine) from linking to pages of a Danish newspaper. See the slashdot article. I assume that the appeals process will clear up this after this time of writing (2002/07). If such decisions are accepted, the whole working of the web would break down.
In 2004, a comment to the W3C TAG noted that the Athems Olympic site, no less, tried to prevent deep linking, to pages such as their sports page. Thus, a vast set of rather unique resources were supposed to be not really part of the web. They even try to constrain how one will link to entry page. The Athens site violates the principles above and sets a very bad example. A pity, when the Olympics celebrate what is best in humanity, that the web presence should exclude itself from the global discourse.
In 2010, according to the New York Times, the Nikkei Shimbun's website decided it could disallow linking, even to its home page. "Links to Nikkei's home page require a detailed written application. Among other things, applicants must spell out their reasons for linking to the site. In addition, regular readers of the site will also notice that the paper has disabled the ability to right-click -- which usually brings up a menu including "copy link address." The paper's "link policy" ends on an ominous note: "We may seek damages for any violations of these rules." The Nikkei says the rules are intended to make sure its pay wall is not breached and to prevent the linking of its content from "inappropriate" sites.
Conclusions about links
There are some fundamental principles about links on which the Web is based. These are principles allow the world of distributed hypertext to work. Lawyers, users and technology and content providers must all agree to respect these principles which have been outlined.
It is difficult to emphasize how important these issues are for society. The first amendment to the Constitution of the United States, for example, addresses the right to speak. The right to make reference to something is inherent in that right. On the web, to make reference without making a link is possible but ineffective - like speaking but with a paper bag over your head.
A reminder this this is personal opinion, not related to W3C or MIT policy. I reserve the right to rephrase this if misunderstandings occur, as its always difficult to express this sort of thing to a mixed and varied audience.