Lee makes a particularly bad spokesman for objections to fanfic anyway because from all available evidence he makes most of his living writing scripts for series television, tie-in novels, and (as my fellow guest pointed out to me) fact books about television shows -- things like Unsold Television Pilots, and Television Series Revivals. The first two categories are all about taking characters and settings created by other people and writing new stories with them -- fanfic in everything except what Lee claims is the distinguishing point that it is with the full authorization of the creator. And the books in the last category profit off the creations of others *without* authorization -- because legally you don't need to have authorization to report facts. So in the venn diagram of 'borrowing characters to write fiction' and 'use without authorization', where fanfic writers are in the intersection, he's got one foot in either camp even while he's going after the people in the middle.
For the record, since someone in the comments over there asked sincerely, and I too am sorry I didn't get a chance to talk about this on the show -- I for one would be thrilled to know that people loved my characters and my world enough to want to come on in and play, not to mention that I would be wildly grateful for the free publicity. I would love for people to put up posters and make costumes and invent their own stories and fantasize about my characters. If they did, that would mean I was doing something fundamentally right -- that I was creating characters that people wanted to make part of the shared culture by which we communicate with one another. And if enough people feel that way about my characters, I am going to get to keep doing this work that I love. Not only would I not look down upon that kind of fannish activity, I would love to do whatever I can to encourage it.
Some fanfic writer out there who is having herself a good time with friends, doing creative work, trading her stories around -- she is not threatening me. She is not defiling my work, even if her story has (gasp, shock!) sex in it, even if it has content in it that would upset me to read. I won't be reading any of the fanfic anyway (just not worth the potential legal headaches), so what difference does it make to me? Chances are this fanfic writer bought my books and so is helping to pay for me to keep doing this. The last thing I want is to chase her off -- I want her to stay and invite all her friends to join in.