So carving off characters can be a way to comment on the original work—to expand on its themes, to examine what it erased, to update it, to teach folks about it, or just to enjoy it (and surely enjoyment is an important goal of lots of literature, not excluding the Sherlock Holmes stories). Interacting with literature and appreciating literature means, in no small part, talking back to literature. And a big way in which people talk back to literature is by dissecting it, reassembling it, and making it their own.
Again, that deconstruction can sometimes be ugly. Not every use of Sherlock Holmes is going to be pretty, or make the Doyle Estate happy. No doubt there’s X-rated Sherlock/Watson slash fiction out there that would make Conan Doyle rise from his grave, if he could manage it. But to say that it’s a crime against literature to reuse Sherlock Holmes is like saying that Doyle committed a crime against literature by turning Dupin into Holmes. Artists and writers always engage with and respond to other writers. That’s how art gets made. And that’s why it’s a good thing for culture, for literature, and for Doyle himself that it looks like Holmes will finally be completely free to be used, abused, and celebrated by everybody, free of charge.
[QUOTE] From Noah Berlatsky, Great News: Now Anyone Can Write and Publish a Sherlock Holmes Story