I agree with you, this could be a problem in general, but from my understanding of everything that I've read in regards to it, this is in response to sites like YouTube and Google Video and others allowing users to upload videos from copyrighted sources.

I mean, go on YouTube or Google or anywhere like that and search for the latest top music video and you will find it there. Look for a news cast and you'll likely find it, same with television and movies.

I really think that right there is the whole reason this is coming into play. Is someone really going to worry about harmless fanfiction? It's not like any reputable publisher will touch it without knowledge that it had been commissioned by the original creator.

Your breakdown is great, hopefully more of the people who are going nuts over this will read it and settle down before the mass hysteria gets worse.