As for the legality--it is true that owning copyrighted, and most importantly popular, 35mm films is something of a grey zone. If I'm not mistaken the actual ownership of said reels is not illegal per se, but it usually implies that less-than-legal means were used to obtain them as 35mm prints are not commerically sold. It does not always mean that they are stolen or illegally obtain however, and collectors enjoy a relatively uneventful if somewhat underground trading market. Ebay was pressured by studios to stop listing prints because they felt it encourgaed theft. With the advent of home video in the 1980's the once-controversial issue of "owning films" has sort of been mooted.
And oftentimes private collectors have been the source for film restorations for material previously thought to be lost or damaged.