To me, Terminal of Tribute To has always seemed overly vitriolic. I can see where Mark is coming from - they are his songs and those are his former bandmates - but from a multi-millionaire, and one who will never resurrect DS, it just seems uncalled for. No one would consider such bands a threat to Mark, or expect him to voice an opinion of them, if he hadn't written, recorded, and released a long song about them.
Overly vitriolic ... maybe, yes. But Mark has always written songs about people in desperate and/or ridiculous situations. It's one of his specialties. With Terminal, he wrote about his former bandmates for once, but if you disregard that fact, it's just a typical Mark Knopfler song. And a good one, as far as I'm concerned.
Mark knows perfectly well that it's not illegal for ex band members to form tribute bands. It's just a bit ... sad.
Any musician has to work to pay their bills, and the work is where the work is.
Also, most of those ex band members have other jobs as a musician, and playing in that DS tributes bands are another job, that if you know it has an audience, as a proffesional musician that have to pay their bills, you can say to that, of course, but it's another paid job.
Think that Danny Cummngs, still playing with MK, also plays with DS Legacy. It is a well paid job for a good proffesional musician.