Your first two sentences literally contradict each other, unless you think that profitability has no bearing on which works get authored.
No they don't. They only do if you think the number of works that wouldn't be produced because creators are dissuaded from producing them by the knowledge that they wouldn't be able to profit from them after they're dead is necessarily greater than the number of new works that would now be created (and otherwise couldn't), using the newly liberated work of these creators as input.
Do you really think that? I certainly don't.
Would fewer "primary" works be created-- maybe? (I tend to believe that almost all human expression is derivative by nature, though. There are few new ideas under the sun.)
Would more derivative works be created? Almost assuredly. There are always more "other people" to build on an earlier work that the lone creator of the work upon which derivative works are based.
I'd bet less restrictive copyright terms result in a net larger number of works.
Fewer works that require fantastic financial investment would be created under a weakened copyright regime. I still believe more works, overall, would be created.
You hope to offset that by enabling the commercialization of fan fiction. I am less hopeful about that proposal, but at least it's a coherent proposal.
I'm saying: I don't think you'll get enough commercial Spider Man fan fiction to offset the damage. But you can at least connect the dots on that argument.
Star Wars borrowed from many sources. Some inspiration and some copying. Most were obscure to most of the audience.
They didn't say most new works would be commercial. But it's plausible fewer very expensive works could benefit less expensive works.
I seriously doubt that passionate authors would refrain themselves from writing because they've been denied a few extra bucks after their death. Many would probably be happier to know that their legacy goes on through the now possible derivative work.
Could such a restriction on copyright impact purely commercial works? I don't care. Work made just for profit has no soul anyway.
If you don't care about a work made for profit because it's soulless, then what grounds do you have to set terms for its release? It's work you by definition think is unimportant.
Also the new business models adopted by those adapting to a lack of copyright may well involve more creative production. For example holding concerts instead of just selling reproductions.
I get a lot more value from recorded music than I do from live music; the idea that we should make it essentially impossible to make a living from music you only play in a studio doesn't sit well, since I like a lot of that music too.
My bigger problem here is a moral one, though. It's simple: a musician takes the time to compose and record a piece of music. I had nothing whatsoever to do with that work. What right do I have to set the terms that musician can use for their work? It's their work, not mine. If they want to charge $5,000 for a copy, that's their right; I can just listen to something else. If musicians writ large want to maximize the number of copies that are made of their work, they can do what Radiohead does and release on "pay what you want" terms. That almost nobody does this in practice is telling.
The incentive to continue wasting your life doing unprofitable concerts is not removed in a world where you can only profit via concerts. It simply changes to hoping for a future of profitable concerts, rather than hoping for a future of profitable record sales.
And while you may cling to one system becasue you like certain facets of it which might change, you also don't know what you are missing in a system without copyright. Policies always have a hidden cost.
I don't doubt the Internet's ability to produce cartoons and memes, but I wouldn't trade all of them together for Blood Meridian or Nevermind.