JMS wrapped this up about as well as can be said on facebook today:
I should point out that the discussion turns into this endlessly-repeating cycle. It starts with: Alan created these characters, he owns them, DC can’t do them. Then it’s pointed out that DC does own them. Then it becomes that the legalities don’t matter, Alan is the creator and he should have the right to control what’s done by and with his characters. Then you point out that Alan has profited mightily by using characters created by other writers, in ways the creators wouldn’t want, and they come back with well, they’re public domain, it’s legal for him to use them. They argue that Watchmen is a complete work, so his characters shouldn’t be used, and you point out that the characters he’s using from books by other writers were also complete, finished works, but somehow that’s different. So you point out that it’s just as legal for DC to use the characters as it is for Alan to use the ones he uses...and they go back to the creator wouldn’t want them used that way...round and round and round. And then today you get Alan’s explanation that he’s not borrowing these characters, which is bad, he’s stealing them, which is good. Which is specious, spurious and a distinction without a difference. It would certainly not matter one whit to the writers who originally created those characters.
“But what they would think doesn’t matter because he can legally use them.”
And further and further down the rabbit hole we go....