The mashups were released by the fictitious band "The Beachles," as part of a notional album called Sgt. Petsounds, and they were a kind of noise-rock experiment in mixing up the two seminal albums (both albums are known for their own use of "found sound" and mashup techniques).
Clayton Counts produced the album for some DJ friends of his, and was not commercially compensated for his efforts (Counts has recently relocated to look after sick relatives and is broke, lacking even a telephone). It's idiotically inconceivable that anyone who hears Sgt Petsounds will decide that they've got all the Sgt Pepper's they need, and decide not to buy the Beatles' original as a consequence. No economic harm could possibly arise to EMI as a result of the existence of this album, which was favorably reported in USA Today and other major news outlets.
This follows a pattern set by EMI of indiscriminate censorship of people who do to the Beatles what the Beatles did to the artists who inspired them. First EMI tried to crush DJ Danger Mouse's incredible "Grey Album" (the White Album plus Jay-Z's Black Album), then they took down djBC's Beastles (The Beatles plus the Beastie Boys) and now they're coming after The Beachles.
Copyright is supposed to protect expression and encourage creativity. EMI is using copyright to suppress both. They are censors and thugs.