John Cleese has a wonderful talk about how each project consists for 'open' and 'close' modes [1]. In one sentence - open mode is playing around with ideas and stumbling upon a gem in the rough, while closed mode is the execution of polishing that gem to perfection.
Seen through this framework, I would claim that 'cloning' is the act of jumping in on someone else's open-mode work, and forking a new close-mode.
Why do we care when someone does this? I think that as the open-mode is a highly creative process, it is hard to not get emotionally attached to the rough-gems it produces. Some will describe it as nothing shy of birthing an idea. In that sense, the kick-in-the-gut that I feel is probably the sense of loss associated with someone 'snatching my new-born'.
I'm not suggesting that cloning is good or bad, but just trying to provide a reasonable explanation to why we feel pain when someone clones our work - even though we know it's OK.
[EDIT: there are situations where 'cloning' is in essence thievery. And that's not OK. Where to draw the line deserves its own thread.]
[1] John Cleese on creativity http://www.youtube.com/watch?v=VShmtsLhkQg