Well, legally I'd say Lucasfilm had a case. FanEdits aren't meant to be distributed to those who don't own a copy of the original film, but there's no way to enforce that.

It's still a massively jerktastic thing to do, though. These are fans, mostly of the honest variety, mostly who already own all six movies on DVD (and probably American Graffiti and THX as well) and want to express their fandom by improving on the flaws they see in Lucas' films. Shooting down fandom is bad for business, is it not?

Lord knows I've given DC Comics about a million dollars since I got into their universe through fanfiction.