And I'm not talking about the long gestating animated version from Disney where Holden would have been a mouse. Not kidding. Really was going to happen.

Anyway, lets say that JDC gets away with this as fair use. He has established that these characters, including Mr. C belongs to him. He would be able to sell the rights to that character and book and then people would be able to make a movie based on this character. What will stop the producers from changing the age say of this character to better fit today's market of teenage movie goers. And so on and on. The fact that this guy merely madlibbed CITR would lead to exactly that. And then JDS would have no redress.

Think about fan fiction. If this was allowed, what would keep producers from taking some story written by fans of say Star Wars and using those pieces as basis for films without having to deal with Lucas? (Okay, that may be a good thing but you get the drift.)