The EFF responds, in turn, that "reverse engineering is a fair use when done for purposes of fostering interoperability with independently created software," saying that yes, even though jailbreakers are using Apple's copyrighted code, they are doing so in a way that allows them functionality that Apple doesn't provide access to on their own.
At this point, of course, this is just a complaint in the copyright office, and Apple hasn't made any legal moves yet against anyone responsible for jailbreaking. As the EFF states, it would be extremely hard for them to go after individual jailbreakers -- if you buy an iPhone, it should be your right to "get under the hood," as they say, and do what you want.
But (and keep in mind that this is TUAW, not The Unofficial Legal Weblog, and we are not lawyers) it seems Apple may be able to try and make a case against anyone offering software that does modify or otherwise "misuse" their copyrighted code. We'll have to see if they explore that position more in the future. You can read Apple's full response here (27 pages). You can see the EFF's initial filings here.
Stay tuned for more news and analysis on the issue.