> if it's selling licenses to things it doesn't have a right to sublicense, it's committing fraud
Except it's not (as per TFA). You have the right to license public domain images. Anyone does. The fact that nobody needs a license is completely beside the point. People buy things they don't need all the time. It might be fraud if you told people that they needed a licence. But it might not either -- it depends a lot on the situation (and IANAL).
Think about it this way. It would be stupid if I couldn't make a poster of a public domain image and sell it. That's the whole point of the public domain. You don't need to buy my poster -- you can make your own if you want. But I'm offering it to you for some money. It's just as stupid if I can't sell a download service for the same image on my website. You don't need to use the download service. You can get the image somewhere else. But I'm offering it to you for some money.
Just like Penguin Books can offer the complete works of Shakespeare and not tell you that you could have gotten them somewhere else for free, so too can you get an image from Getty, even though you can get that image for free somewhere else.
What's goofy is that they offer a license as well. It's strange, but there is nothing wrong with it. You download my picture and pay me $500 and I'll be completely happy if you make as many copies as you like of it. I'll even offer you a license for my happiness. Goofy, yes, but illegal, no.
What might be illegal is if they said that you can't make a copy of this image without their license. However, I don't believe that they say this, so it's a moot point.