There is such a thing as fair use too....if it's not marked as copyrighted, and the image is used for personal purposes such as on a cake to be eaten and not sold, it's not entirely clear to many people that the image can NOT be used. Especially if it has already been separated from its source and handed around, which happens a lot particularly now that we have Internet.
If people only used intellectual property they created themselves, we'd never have achieved civilization....no stone tools, no spear-points, not even political satire. Right or wrong, concluding you can't use it because you didn't make it simply wouldn't be practical.
If I wanted to have a cake printed for a party I might have done the same thing without thinking about it as a problem, and I know more than most people about what is and isn't OK under the law. As to how the cake ended up on the Internet, that's another issue.
I'll put my longwinded opinions and tiresome pendantic legalese under a spoiler so as not to clutter up this thread.
Spoiler
Cease and Desist letters exist to put the unlicensed user on notice that they are in violation because copyright violation has an element of "intent". If a person uses a copyrighted image (the wrongful act or "actus reus"), the crime of copyright violation is not complete until their intent to do so wrongfully (the "mens rea") can be established by, for example, refusing to desist when instructed to do so by the copyright holder, or by other means establishing their state of mind at the time such as boasting about their evil plan. Only when there are both actus reus and mens rea is any crime complete, with very few exceptions called "strict liability crimes" that don't require intent such as dumping of toxic chemicals. Even murder of course requires intent to be a crime.
My point is only that the person who used said image for a cake without permission is not necessarily guilty of copyright violation, not to give the person a "free pass".
Meanwhile, that site seems pretty mean about making fun of things and jumping to conclusions, for example the "sexism" they claim to see in the two separate images that show a guy with his feet on the desk and a woman working at a computer. I don't see it as sexist without jumping to unsupported conclusions, like their assumption that the guy is the boss...if one assumes the images are related to each other, it could just as likely be the woman is the entrepreneur and the guy is waiting to talk to her, or he's just casual and lazy while she's hardworking...my conclusion is that the images are simply unrelated and mean nothing. To me, it seems to be the website that is unlawfully re-publishing the copyrighted work and stating it's a "wreck", with enough sophistication to know it's not fair use.
I'm not sure I see how that cake is a "wreck" and perhaps the rightful owner might send them a C&D and get it removed from their site if they don't like it. As to the person who used the image without permission in the first place, I think it's been eaten.
I gather this is a well-known image here? I don't know it before this but I like it and I think it makes a really cute cake. I'm sorry it was used without permission and unhappy it's being called a "wreck", but I'm happy to get to see it and, I thank whoever created the image. Those pirates should at least have saved you a piece.