"Considering that (if I'm not mistaken) Virgin owns the rights to all of the Smashing Pumpkins music produced while they were on the label, it stands to reason that, legally speaking, Virgin can do pretty much whatever it wants with it."

From what i have been taught and have read myself, copyright is bounded to the actual artist him/herself and to noone else.
Considering for examble the contents of a book; all the written parts of the product called book is property of the one who created it and not the publisher. A publisher owns the right ONLY of publishing that particular book, however it holds totally NO rights on the contents of it. The same applies when the writer has a contract with a particular publishing label. The writer is then bound to publish future work to that particular label, however if the label for whatever reasons (usu for their own profit) uses contents of the published book without the permission or knowledge of the writer, then copyright has been infridged.

Now instead of a book we take the music produced by the pumpkins, like you mentioned. Virgin as a label has the right when in contract with a band or a musician to release albums, compilations, singles etc., in general the musical production of the creator, for as long the contract is active.
However, if this same lebel uses a song or songs (=musical contents) for whatever reason (even from those particular albums which the label has released) WITHOUT the permission of the musician or band, then the copyright has been infridged as well.

That's what i was trying to explain...not an easy task...lol