I'm pretty sure that most of this has fairly little to do with leveraging fanfic into 50 Shades-like properties. I mean, I'm sure that's on peoples' minds, but I suspect that the main impetus is just an attempt to monetize fanworks. And most of the restrictions on it flow out of that - in particular, I suspect that the stuff about taking control of peoples' work is primarily so that they can (1) be completely clear about their ownership of the copyright and (2) be completely clear from any claims that they've plagiarized fanworks - which afaik are the two main sticking points for companies dealing with fanworks. If they're aware of them without taking them down, it weakens their copyrights; if they don't own it, they run the risk of someone claiming that they stole their original ideas.

So I think the main impetus is to get some control over the fanworks that have been created and make sure it doesn't get too wild and create a community around it that they have control over, and attempt to find a way to turn it into some measure of profit. And taking control of the work is primarily to make it possible to deal with fanworks without dealing with legal problems. I'm sure they would be very happy if something like 50 Shades came out of it, and I'm sure they'll stay aware of what the most popular works are like, in terms of episode ideas and potentially adaptations. But I strongly suspect that's just gravy and mostly they're probably NOT going to do anything with the work that gets posted. I don't think they're going to sweat it if they don't get a superproperty out of it.

I still agree that it's bad. I just think the 50 Shades aspect is much less central to this than people seem to be saying.