If I'm understanding your question correctly, I wouldn't call it plagiarism; it's just mis-cited text. As you pointed out, we should cite the source were it was read, using "as cited in" or "as quoted in", etc. Plagiarism is copying text without proper attribution or close paraphrasing. --Spike Wilbury (talk) 10:27, 10 May 2014 (UTC)[reply]
I misunderstood TFD's question. It is unquestionably plagiarism and a copyright violation. I'm going to see how far back the copyvio goes and what action might be appropriate. --Spike Wilbury (talk) 18:13, 14 May 2014 (UTC)[reply]
Update: Since the article contains substantive plagiarism/copyright violation going all the way back to its creation, I've blanked the page while the AfD is in process. Further action will be taken depending on the outcome of the AfD. --Spike Wilbury (talk) 18:21, 14 May 2014 (UTC)[reply]