I'm not a legal expert nor a Microsoft spokesperson. But my observations are:
MS believes that it owns the software and is selling licenses for its use. As the software's owner, MS claims it can control how the software is distributed and used.
For example, a MS Windows 7 license includes the following terms:
"SCOPE OF LICENSE. The software is licensed, not sold. This agreement only gives you some rights to use the features included in the software edition you licensed. Microsoft reserves all other rights. Unless applicable law gives you more rights despite this limitation, you may use the software only as expressly permitted in this agreement. In doing so, you must comply with any technical limitations in the software that only allow you to use it in certain ways. You may not:
• publish the software for others to copy;"
Microsoft has enforced this restriction in the past with things like non-Microsoft collections of Windows Updates and unauthorized software distribution.
Right now, there appears to be at least one online source Microsoft-contractor-hosted Windows 7 images that was originally intended for subscibers who'd paid for online Microsoft software distribution services. But the link is wide-open.
Downloading software from such a link is unethical, in my opinion. Whether it is illegal can only be answered in a courtroom.
It's somewhat analogous to a wide-open Government site containing classified documents or a wide-open banking site with credit card numbers exposed. Those sites are obviously not intended to be wide-open. Whether it's illegal to download the data or whether it's only illegal to use the downloads for illegal purposes is another question.
Finally, Microsoft has approved ways to obtain their software in case of loss. OEM software obtained with PCs is supported by the OEM manufacturer. Generic OEM software can be replaced with suitable proof of purchase and payment of a replacement fee. Volume-licensed software media-only can be purchased from distributors. Subscription-based software can be re-downloaded if the user has an active subscription.
No, it's not always convenient. I know.