On the other hand, I'm not sure if we should be thrilled with the idea of companies searching though all the fanfic they can find with the intention of stealing fan's original ideas and storylines and then suing anyone who complains about it either.

In the end, it's copyright that needs significant reform. Under a sane system of copyright tolkien's works would already be in the public domain and this guy would have been well within his rights to sell his story and sue if his original contributions were used without his permission. Given how things are currently though I can't see things playing out any differently.