It will probably be some time before we know the legal answer, but the common sense answer is pretty clear: absolutely not.
The question gets some needed in-depth treatment courtesy of Steven Heller in his essay about the Fairey controversy for the New York Times. I don't completely agree with Heller's analysis, but his conclusion is spot on. It's well worth a read for anyone who is concerned with creative rights and responsibilities in the age of new media.
Organizations like the AP are on life support. They have failed miserably to adapt to a changing cultural climate and now find themselves so married to an outdated business model that they're making desperation plays. When it comes to Shepard Fairey, I've never read (and nor can I imagine) a coherent argument in favor of the AP's position. At best it seems like a sad attempt to return to status quo. At worst, misguided bullying.
Personally, I have no use for Shepard Fairey. I don't find him exciting or interesting, and I think his Obama poster is a fairly average piece of work. But to suggest that he somehow "stole" the image is insane. Fairey's work bears little resemblance to the original in substance, and no resemblance in intent. It is an original piece of work, love it or hate it.
Maybe this is a legal grey area, but that's only because the laws themselves are old. Organizations like the AP will have to come to terms with that eventually, whether it's by choice or by force.
So we're clear, I wouldn't ever defend outright theft. If someone slaps an AP photo on a t-shirt and sells it, that's wrong. If someone takes an entire AP article and republishes it without attribution, that's wrong. But to deny the fact that content has become fluid is to become the old man on his porch who insists that everything was better "in the old days."
Maybe it was, but times change. Better to work with it than to deny the fact that it's happening.