Funny you should mention 90%, because 90% of pretty much everything is crap, according to Sturgeon's Law
However, you could apply the arguments you just made to, say, fanfiction, fan art, or sprite comics. I don't see anyone giving THEM cease and desist orders. In fact, there's another "fan-game" that has been aknowledged by the original copyright owners... And actually gave the green light. Black Mesa, anyone?
Square are just jerks. (Also, I heard that fan-sequel to King's Quest is still in development.)
Thing is, most companies see these fan-games in the same light as fan-art and such - to them, it's free advertisement. Of course, some copyright holders, and not just game companies, see fan-works in the same light, quite a few authors are known to hold distain for them. But really, there may be some isolated cases, but when there's an entire online expo devoted to fan-games, it's obvious that anyone who does have a problem with it is in the minority.
Of course, I'm doing a fan-game myself, and it's my multimedia project, but my teacher doesn't mind as long as I give credit where it's due, acknowledge what belongs to who and which bits I actually made myself.