This is an interesting fallacy because it becomes so clearly absurd if you apply it to, well, any other area at all.
To make it clear, the fallacy is 'the only rules of conduct that matter are the law of the land. Nothing else matters'.
So, let's see. Would you go to a church, stand up in the middle of the service, and yell "YOU'RE ALL MORONS! GOD IS DEAD!"
Would you consider that acceptable behaviour? Even if you don't believe in God? *I* don't believe in God, and I wouldn't do that.
But it's not illegal. So, why wouldn't you do that (assuming you wouldn't)? Because you recognize that it would be outside the accepted code of behaviour in that environment. It would be rude.
If you did this, the church in question would likely ask that you not attend any events there in future. Would you say they would be unreasonable to do so?
Okay, more examples. Would you sign up for LKML and send five hundred messages discussing the NFL? Again, this isn't illegal at all. But would you think it would be a reasonable or polite thing to do? Would you be surprised if you were banned from the list for doing it? But it's not illegal! What right does LKML have to enforce its cruel and arbitrary standards of behaviour on you when you're not breaking the law?
See, it *really* doesn't stand up at all. But for some reason, you think it's fine to apply the bizarre idea that behaviour can only possibly be wrong if it's illegal to the sphere of sexual harassment.