You need to read the thread more closely. Plus even if what you said was true, it would still violate copyright. Otherwise we'd be neck deep in indie versions of Sonic, Mario, Megamans, whathaveyous.
Yeah, I failed to mention the stolen music and Larry Huffman voice overs, which were a direct rip from the game. The music tracks in the original game were licensed covers of classic rock songs. Blizzard might own the compositions to these particular chip-tune versions, but the songs themselves are owned by the original artists. The voice over is definitely in violation though.
As for the character art, the art isn't using stolen assets from the original, but the characters may still be copyrighted by Blizzard. Though, if they had an artist that could draw this stuff, it makes me wonder why they just didn't get him to create a bunch of new character portraits that are loosely based on the originals. How hard would it be to change Snake Sanders to Snake Sommers or something?
The vehicle designs in Rock n' Roll Racing were actually based on Tyco RC and Radioshack RC cars. The Tyco RC Hovercraft and FastTraxx are the two most notable designs. The VW Bug 4x4 was based on an old RC car that was made by Radioshack. Blizzard wouldn't have any copyright claim on those.
I think with some modifications, they could easily make this game legal and still be a tribute to R&R Racing.