Mike -
I'm not sure that you're reading this situation correctly. The OP has a company that produces service manuals. They are not from Kawasaki. Just like Haynes, Chilton, or any other separate company. To my knowledge, none of those folks are required to pay royalties to anyone for publishing books on a topic, but they likely do have to get permission from Kawasaki at some point to use their name and trademarks in print.
I have no reason to believe that this online company does or does not get the same assurances from Kawasaki that the other manual creators do, I just don't know and neither does anyone else. What we can be sure of is that their opinion is correct, that freely copied copyrighted service manuals, produced by Kawasaki, are by the letter and spirit of the law, illegal.
There have been any number of questions about this on online forums and even enthusiast magazines for years. What it comes down to is it's highly unlikely any manufacturer would make a stink about some sharing of those manuals from time to time, as the profit center is the bike, and not trying to make huge margins on manuals afterwards. And more manuals mean more people working on their bikes anyway. But it's still not a great idea for us to rub Kawi's or any other manufacturer's noses in it, because if push came to shove they would have a right to enforce copyright as they see fit. That's the reason that these electronic manuals aren't traded openly on sites like this.