"There is also a big difference between commercial and non-commercial use. I believe that non-commercial use should be a lot freer than it currently is. That would, amongst other things, allow fan fiction writers more leeway to sub-sub-create within an author's sub-created world or using their characters. Publishing that sub-sub-created work for money, or selling merchandise based on that work, would be commercial and subject to the tighter commercial rules."

I agree with this. New works which derive from existing ones should not be covered by the artistic control aspect of copyright, though of course non-commercial distribution of the original should be controlled as it does have a direct negative effect on the copyright holder.