I reblogged a good post yesterday talking about the commodification of art in general, and how one of the good things about fanfiction is that it stands outside that trend, sort of as a counterargument to the one you mention about folk art (which I remember but don't have the link to offhand).

Also, I understand the OTW argument that fanfic,as a transformative work, is already legal, so this is voluntarily putting fanfic into legal bondage.

Yeah, that's the biggest concern from my perspective, too. Does this mean that media properties that sign on to Kindle Worlds suddenly see free fanfic as a competitive threat? Or do they continue to let the "gray market" slide?

But I can understand why your concern is less visceral than the Tumblr buy-out. For one thing, if there are impacts on wider fandom from this, they'll take a lot longer to manifest. Also, just on a personal level, I highly doubt that any of the media properties I write for are likely to ever sign on with a program like this. Maybe, *maybe* the Marvel universe, but even that strikes me as a stretch.