This is just a sad and disappointing story.
I know Jonathan Coulton is some sort of music god among geeks, but I'm not personally all that familiar with his work, whether inside or outside of video games. Regardless, he deserves better than this.
The whole "cover of a cover" thing is perplexing, as far as how copyrights should be handled. I suppose it makes sense to say that you can't steal from a person what they never technically owned in the first place. On the other hand, Coulton's arrangement was so extensively reworked from Sir Mix-a-Lot's original, and Glee's version so identical to Coulton's, that you'd think some credit from Fox to Coulton would be in order.
I actually used to watch Glee and thought the first half-season was pretty brilliant. A few episodes into the second season, I had seen enough and dropped it cold–removing it from my TV watch list, even when nothing else was competing for my time–which, come to think of it, I almost never do that far into any remotely serialized show. Regardless, I even feel like Glee deserves better than what it is doing to itself through this shameful mess.
But I absolutely love Coulton's "viral PR hackitude" response, rereleasing his version on iTunes, now as "In the Style of Glee," and donating the proceeds to charity. Talk about owning it (even when you don't really).