I also think that Doctorow's dismissal of his concerns as "trivial on the scale" is silly and somewhat arrogant. Automated alteration of a picture to the point of making a new picture non-discernible from an original is a real different thing. In this case it was very subtle, but the application of this could really have some broad impacts. I recall for example the doctored photo from Iranian missile launches [1] or the Egyptian PM red carpet photoshop [2].
Yes this has been going on forever, but automating it makes the impacts really scale quickly.
[1]http://thelede.blogs.nytimes.com/2008/07/10/in-an-iranian-im...
[2]http://www.theguardian.com/world/2010/sep/16/mubarak-doctore...