But it frustrates me that the discussion seems to be all about what the current law is and how anyone should know better. Hardly anyone is saying, "Wait a minute. Yes, this is illegal, but should it be?"
The whole area of derivative work has become completely disconnected from the actual purpose of copyright, and (like nearly everything else in the intellectual property sphere) is socially dysfunctional. Copyright exists to encourage people to create by giving them a fair chance to make some profit from their creations. It does not exist to allow big corporations with big legal budgets to stifle creativity with the threat of infringement lawsuits.
If there are two minor players in the creative marketplace, and one creates a work that is a minor success, and the other produces a derivative work without permission that comes to overshadow the first, there is a case that a harm has been done. But when someone creates a work that is so successful that it is part of our common culture, that in fact creates a franchise that is aggressively inserted into the culture with a whole array of spin offs and tie in products, it is no longer necessary for our legal system to provide legal protection that disallows the public from using the culture they live in as the basis of their creative works.
The case of the naive, and yes probably stupid, fan fiction writer should not be a cautionary tale telling us to stifle our creativity and not produce derivative works. It should, instead, be a wakeup call that we need major reform of our copyright laws, to return to the purpose of benefiting society instead of only benefiting the large corporate copyright holder.