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Altair users were making copies of the paper tape that Micro-Soft and sharing them.

Altair users were making copies of the paper tape because they had contributed code to the group.

Gates then took that code and published it. The Altair users, figuring that since much of that code was theirs, took Bill's code and distributed it. Bill then published his whiny letter.

The Homebrew club had been doing this kind of thing for a long time...sharing code between them. Bill comes along and, with the advice and financial backing of his corporate lawyer father, starts making legal threats.

The history rewriters at Microsoft tend to start their history with the publishing of the compiler and convieniently forget what went on before that.

For the love of god, please stop making things up.

From Steven Levy's Hackers page 228:
The Homebrew Computer Club crowd was out in force when the [MITS] Caravan met at the Rickeys Hyatt on El Camino Real in Palo Alto in early June [1975], and were amazed when the found that the Altair on display was running BASIC. It was connected to a teletype which had a paper-tape reader, and once it was loaded anyone coudl type in commands and get responses instantly. It looked like a godsend to those hackers who had already sent in several hundred dollars to MITS and were impatiently waiting for BASIC....Years later, Steve Dompier tactfully described what happened next: "Somebody, I don't think anyone figured out who, borrowed one of their paper tapes lying on the floor." The paper tape in question held the current version of Altair BASIC written by Bill Gates and Paul Allen. Dan Sokol later recalled that vague "someone" coming up to him and, noting that Sokol worked for one of the semiconductor firms, asking if he had anyway of duplicating paper tapes....Sokol took the tape to his employer's, sat down at a PDP-11, and threaded in the tape. He ran it all night, churning out tapes, and at the next Homebrew Computer Club meeting he came with a box of tapes.

So the HCC members first got their hands on Altair BASIC after Micro-Soft had already written it. Distribution of the stolen software was not limited to those that had already ordered it from MITS.

There are lots of things you can bash Microsoft and Gates about, but Altair BASIC isn't one of them. You don't need to lie to make your point that Gates is a snake.