Quote - The concern is that end users can extract the models from the real-time gaming engines. Yes, the original model/mesh has most likely been decimated to a lower resolution/size, but even at that point it is still a "derivative work" that is protected under copyright law. So, the extra cost for an extended license helps to compensate artists for any possible loss of sales they may have from people who rip models out of games and re-distribute. 

Since I fully support the objective and spirit of EULA, I understand your position. However in actual practice, market is being limited to counter an illusionary risk inscrease.  If we are concerned piracy of assets ripped from games and that the derrived, low resolution models would get re-sold by unaffiliated third parties (game rippers and shared).  Its way remote: Consider since stolen/pirated assets are not legal anyway, commercial game publishers would be real stupid to go through the work of making a game based on this. So its not really a choice for the legitimate developer. Maybe an social media avatar, however it still would be eaiser to aquire the full 2d version from the store and share the HD original.  But even if that were happening would it take actual sales away from a vendor?  I don't think an pirate users would spend the money here anyway and that cancerous type of client would probably generate more risk than return and be better off ignored.  Finally *a point I just hate to make: its not unheard of that the **pirate interest like bad press, can generate more sales than none.  ***Some one parading around second life in a Wizzard Hat and is asked where did he get it - prolly will not say they pirated it (unless they want to be recognized as a prate)  but share where it can be bought legit.  Again I think if pirating were a threat, source would be happening with the original packaged assets already sold by teh store.  I suppose it could be verified by doing some digging in dangerous places.

So bottom line, oppertunity and sales are being left on the table if the market is being ignored.

  Recognizing the sensitive topic, please feel free to edit or delete as necessary.