Why is it unfortunate?
There was a small clothing company here in Australia called 'Harry Potter'. Now, this company had been in existence for YEARS, many years before Harry Potter the book character was even thought of. The clothing company made no attempt to feature wizards or even anything remotely related to Harry Potter, the character.
Unfortunately for this small company; JK Rowling/the publishing company/whatever decided that she shouldn't be allowed to use that name anymore, even though she'd had it for years and her clothing was for adult females, not children (or wizards!). They took her to court and were allowed to force her to stop using it.
Fair?
I think not.
Now in this case, ie7.com is obviously a bit different. But if I want to register ie9.com because my name is Isabelle Elizabeth and I'm 9 years old, why shouldn't I be allowed to? Regardless of the site's content, however, I'm sure if Microsoft wanted to take my domain back, they would. I don't think that is particularly fair, no.