I don't feel entitled to profit off anyone else's IP. It's not about loopholes. Quite the contrary, I am thinking of the principles involved here.
I feel entitled to make or fund my own artwork and share it a few friends/family. That is what would be happening if a rich MoFo commissioned his own personal ST movie.
In theory it doesn't matter if the rich guy spent the yearly GDP of a small country. What matters is that the work was not exhibited for a profit, nor was it widely seen in general. The IP owner's potential profits were not threatened in any way.
I agree that IP owners do have rights over some fan-made works that are not technically sold for a profit. If a fan-made work is widely viewed then in theory it could influence public opinion about the IP (in the creative sense) and/or reduce ticket sales of the official stuff. That could potentially cost the IP holder money.
So far the big movie studios have mostly been looking the other way on fan-made stuff. I guess they expect to profit off the fans' goodwill & enthusiasm this stuff generates more than it costs them (almost always true). But the IP holders are allowing this to happen by choice. It's not a right that fans are automatically entitled to.
There's a little more to it than that.
IP law, generally speaking, is designed to protect the rights-holder (assumed to be the creator, although creators can transfer their rights, and that doesn't address works-for-hire) to allow the rights-holder the maximum ability to control the work they create. PART of that is the profit aspect, but a big part of it is just about control. Most people instinctively "get" the "you made money off of it" argument. What they don't get is "you messed with the owner's exclusive control."
So, consider the following scenario.
I'm Al Gore. I decide to make another environmental movie, only this time it's a sci-fi film. I spend $180 million making my movie. I then intentionally give it to theaters to show it for free, using a portion of the $180 million as my marketing budget to pay for the costs for showtimes. I set up a deal with the movie theaters that requires them to show the film only under certain conditions. What kind of sound set-up, color balance for the display, a speech given at the beginning of each show, etc. Someone comes to the movie with a handheld digicam, shoots a copy, and uploads it to the Youtubes. I sue the crap out of them. They say "But I didn't make any money off of it!!" Not the point. The point is that I'M the one with
exclusive control of the work, under the law. I get to decide how and when and where my movie is shown. I get to decide whether any merchandise is sold based on my movie. I control ALL of it. If someone took my movie and -- without my permission -- made a sequel or a side-story or whatever, they're still stepping on
my exclusive rights. Even if, say, Greenpeace takes my movie and makes a sequel, or a spinoff featuring the same characters or set in the same fictional universe or whatever, it's still
entirely up to me whether Greenpeace is allowed to make the movie. Even if Greenpeace is "on my side" or whathaveyou, I chose to make the movie on my own and not include them for whatever reason. It's all up to me, and Greenpeace has screwed with my control. The law protects that: it protects my
exclusive control of the work.
The Axanar project set out to combine too much quality + too much widespread viewership. They needed to compromise one or the other if they expected the studio to keep looking the other way.
Even a million-dollar fan movie isn't likely to hurt Paramount's bottom line enough to bother with the legal costs. But setting a precedent is very important in the longer term. I'm sure Paramount is thinking they have to draw the line somewhere and this project is asking for it.
Bingo. Most of the time, the studios turn a blind eye to this because (A) it's too much of a pain to pay to send out C&Ds (which, by the way, aren't legally binding or anything. They're just "nastygrams," basically, but they suggest much worse consequences to come.), and (B) because the fan films aren't enough of a threat in any way, and (C) they don't want to risk the goodwill of their fans by crushing EVERY fan-driven project. But mostly (A). It's just too expensive and time consuming.
Axanar, though, put itself squarely within Paramounts sights, and practically dared Paramount to come after it. It is, quite simply, mind-boggling that they actually thought they'd get away with it.