Free-appropriation - plagiarism or unique art form?

I recently read an article about the controversy surrounding German author Helene Hegemann, who cut-and-pasted fragments of other works to form her own. You can read more here. The question is raised - is free-appropriation writing a form of plagiarism or is it an art form in its own right? I believe that unique art with a personal stamp can be created using bits and pieces of preexisting works. In the words of none other than Pablo Picasso: "bad artists copy, great artists steal." He is not referring specifically to free-appropriation art, but the concept is still applicable - as long as artists don't simply "copy" works but reassemble them into something personal and meaningful, they are practicing a legitimate and unique art form. During my days in middle school, I raided the recycling bin obsessively for Newsweeks and New Yorkers, because I quite enjoyed cutting them up and creating collages. Yes, the individual images were crafted by others, but I made them into new works with a distinct voice. Hegemann is also a collage artist and I think that as long as she credits those whose works she uses, she should be free to practice her art.