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I didn't think Harry's posts were insulting at all. It's a pretty strong statement of a position, but that's all it is. There are no personal attacks, unlike the responses to Harry's posts.
There is an awful lot of defensiveness in this thread, including some convoluted manoeuvres to try to claim fan fiction is completely legit. Maybe they'd work in court, but they seem to open the door for a number of less innocent things if they do.
My feeling is that it isn't really legal, but is tolerated. I don't see a problem there. Most sites and authors are probably prepared to pull everything if it ceases to be tolerated. (Although it's been on the internet by then; it's probably too late.) They are aware that they are not standing on solid ground.
I think the law is kind of inadequate, although I have no idea how to fix it.
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