I am not worried about the backlinks I receive from this site. if google doesn't like that site then they will simply stop the link juice from those links. How can my site get penalized from getting backlinks? I can't. Otherwise it would be possible to get your penalize competing sites. Yes google will most likely penalize the site but even if the site is penalized and the webmaster makes a couple bucks a month from the domain then it is entirely worth it to go out and buy up other domains and rinse and repeat. Just imagine this guy doing this with hundreds or thousands of domains that all make a few dollars a month? All those pennies do add up! Thats what I am worried about. Then again google will most likely ban their adsense account if it gets that big. I am personally not too worried about it but I just think it is interestsing.
If the original site finds out that you duplicated its site content completely, they will be able to take action against you if it's a big enough and well known site that you duplicated.
I don't think it would matter - otherwise it would be so easy to get someone in trouble and bring a competitor down. Just create a website with links to competitor website, and then make many copies of it, and then set them all up on different domains. Nope, it's not your content that is copied, you'll be fine.