Collaboration in PenFM happens in another, more powerful way: the ability to react to parts of a story with simple likes and more thorough commenting. Imagine having written a story, and now you have to send it out to friends & peers to review and give feedback on. Would you really rather have a back-and-forth over IM, constantly having to find the part they're referring to? On PenFM, they just click the section, type a comment, and you get notified to go take a look at what they wrote. It's asynchronous.
Not sure what you mean by "prevent people from cannibalizing each other's work", given you can very easily share docs and disable edit features at the user and group level but still allow people to read changes as they happen