Oh wow, you guys are hilarious, especially you HarryT -- I'm not sure what must have happened to you in the past involving fanfiction and their respective authors, but judging from the way you talk about the people who are involved with fanfiction they must have decided to write about one of your books, commercialized it and then subsequently got more popular and made huge sums of money off of it... but wait, that doesn't really happen.
I really don't know what's wrong with the public perception of fanfiction, but most places I read about it, it's often held in the lowest possible regards, unreasonably so if I might add. An example for a good fanfiction story would be for example
Harry Potter and the Methods of Rationality, which is even
"produced with the consent and at the request of the author." (Yes, that is J.K. Rowling)
To me fanfiction are simply stories that continue on an already existing canvas ranging from giving the story a different direction, placing the characters in an "alternative universe" where previous blood-sworn enemies suddenly find themselves as teachers and students respectively or even combine two different works together and create something, in a sense, entirely novel.
Ultimately it is a way to enjoy already existing works in a new and different way, for both: the author and the readers. It is a way for fans of a certain work to experience "more" of it, to possibly bring back the characters one loved so much when reading the original; even if the original story might have ended long ago or didn't develop in that direction at all. One can finally see one of these "what if"-scenarios realized: "What if Voldemort didn't die? What if Harry was raised by highly intelligent and functional parents and turned out entirely different? What if Emiya Shirou suddenly landed in the Sekirei universe? What if character X started to fall in love with character Y?"
There's no reason for criticizing them the way you did; sure the writing might very often not be the best, but what do you expect? These are authors that write as a hobby trying to create their version of a work they love, they are not professional authors -- they don't plan on selling their works, they simply write for their own enjoyment and possibly that of their readers.
Personally I read regular books and fanfiction and love doing both and it certainly doesn't turn me into a strange individual or freak, an attitude I also often see. I don't dismiss a story the instant I find out it's "just fanfiction", that's short-sighted and stupid -- if I enjoy it I'll keep reading it, no need to get bent so out of shape because of some people having fun with something you apparently don't enjoy. I'm nearly at the point where I would liken the stance of some people towards the genre to "racism" in the literary world, for the lack of a better term.
"Oh, that's fanfiction? Burn it with fire, it doesn't matter how good it might be..."