The case with The Passion of the Christ is a completely different story. The people calling for its ban were not infringing on copywrite. They were concerned about backlash against Jews (whose claims I feel were exagerrated IMO - I personally could care less about a film about Jesus getting beat up)
I do excuse myself for making generalizations about people, but when I heard about this story last year or whenever it was, I found it perposterous.
As far as fan-edits are concerned, this ruling is nothing more than a reminder that you can't take copywrited material and sell it without having the rights to do it. Fan edits are not being sold - they are meerily a hobby passed and shown between friends. It's fine. The REAL issue we should be concerned about is the DMCA and how that affects edits made from DVD sourced material.