Do you have a citation for the claim that Schwartz was only copying "publicly funded research papers"? My understanding is that he was trying to pull all of JSTOR, which would be copyrighted papers going back to all kinds of funding models from many countries, not just US public-funded research.

Don't get me wrong, as a researcher myself most of us see him (and his successors in piracy) as heroes that make our work a lot easier by making everything so easily accessible, usually even more convenient than our own institutional libraries. But your claim sounds like inaccurate myth-building.