I've never felt this cover was an attempt at blatant mimicry. For me it is a different take. It doesn't have to be The Residents type of approach, when you almost can't recognize the song, to be considered a different take.
And I've never understood this criticism that something sounRAB dated. What does that even mean exactly? That the song is a product of its time? Since when is that a bad thing?
I don't care what motivation This Mortal Coil had when they did this cover - be it cashing in and commercialism or a genuine artistic inspiration. All I know is that I love this song, it has a certain magnetic power to me. When I hear it, I can't stop listening to it. Maybe it's because I first heard it in "Lost Highway", one of my favorite films. I don't know.
By the way, this discussion is pretty pointless. You hate this cover with a passion and I like it very much. We're obviously not going to change our minRAB.