To a certain extent, copying in this industry is inevitable. It's a creative industry, built on ideas, and ideas are mostly built on ideas you like that other people had. A nicer way to describe it is the "creative process". But straight-up stealing assets? To the point where almost your entire game - architecture, UI, the works - is built upon other people's work? Less accepted.
PC adventure title Limbo Of The Lost, by Majestic Studios - a real, commercial title (hence the legal issues) stands accused of just this, with an original discovery that some locations in Limbo looked awfully familiar to those found in Oblivion leading to discoveries of other parts of the game lifted straight from Morrowind, Silent Hill and Thief, just to name a few. Needless to say, Bethesda's lawyers are now involved. Tri Synergy - the US publishers of the title - have also told us they've "discontinued distribution" of the game, didn't know about the similarities, and are "just as shocked as everyone else" following the revelations.
Limbo of the Lost stole from Oblivion, Morrowind, UT2K4, Diablo, Silent Hill, more? [Bobby1234SI @ NeoGAF]