It really comes down to that doesn't it?
You're the sole source of art you produce, but what you're saying is that you suddenly, by creating a character, gain the exclusive unlimited right to be the only person ever to create any possible creative work with that character.
You're basically patenting the 'idea' of a character, such that no one else can use any variation on that idea.
That's the problem, and it's the problem with patents too; they 'lock up' ideas so they can't be used without licensing / permission; but no just the original idea; all the closely related derivative ideas too.
In practice it's pretty easy (and common) for large holders of these creative patents (for lack of a better word) to do what the Doyle Estate was doing (read here if you're not familiar http://free-sherlock.com/) to troll and shake-down people using the IP; even for relatively unrelated creative works.
Personally, I feel it should be managed more like brands; if I sell shoes with a Nike logo, it's obviously infringement.
...but if I start telling shoes with a logo from some company that hasn't traded shoes in 15 years and their trademark has expired, tough luck to them. You're not a practicing entity anymore; let someone else use that IP instead of leaving it locked up forever.
At some point, though, that's supposed to happen. That's how culture works. Of course most of the stuff so created is going to be crap - most art created is crap, after all. Think what we'd have though, if the Star Wars copyright were over and done with by now, or if the LotR copyright had already expired. Mostly, we'd have a bunch of rubbish barely rising above the level of second-rate fan-fic, but we'd also have some real gems.
20 years is plenty of time.
If you're not familiar with it, have a look at the Touhou project (set of Japanese arcade-style games, where the author explicitly gave permission for people to remix his art, whilst retaining fully copyright over the games, and forbidding commercial distribution of them). Touhou is huge - and it's not just because of the games - the derived art works have significantly impacted take up of the games, and created a somewhat unavoidable franchise, inspired countless of creators to produce and share, and will probably have a long lasting presence within otaku culture.
Notice the author in your example retained full copyright over the games. The author is not allowing derivative games.
In books, this would be equivalent to reusing characters, their personalities or traits, but copying sections of the original works verbatim is obviously still plagiarism.
We do know what it means. It means the price will be higher. Be careful though, because price is not equivalent to profit. Selling a million copies for $10 each is much more profitable than selling a hundred copies for $1000 each.
And if derivative works bring publicity for the original it can drive sales and increase profits, even at the same time as it lowers prices.
For example, you create a popular, compelling character & world. E.g., Harry Potter.
Now suppose that due to its popularity, other artists jump on the bandwagon left and right.
Too many bandwagon-jumpers, and your creation is diluted. It is a commodity. People see it every day.
With nobody else producing works with your characters & world, you are the sole source. If we think about supply & demand, we know what that means.