Uhm... so?
Honestly, I find it odd that you only realize this now.
You know what else is illegal? Unlicensed translations, even if they're non-profit. Which means that scanlations, fansubs, and fan-translations of games (like Melty Blood and Tsukihime) are illegal. This is not new. And as with all of things like it, it's pretty much overlooked.
It's possible to sue people over it, but honestly, it's only 'technically' illegal, to the point where it's on shaky grounds in some cases. This is why most authors wouldn't even bother if they did care, since even if they won such a lawsuit (which is suspect) it wouldn't win them much.
If a series is made into a P&P RPG, as various series are, then wouldn't that waive the 'illeageal fanfiction'? Since the author could just claim they were writing up as toryline for a gaming session and such?
In this case, you would be using it under 'household' rules. However, publishing it onto a website like FF.net and the rest would be illegal. Just like how showing an anime or something similar is not allowed unless you have special permission.