I think in hindsight it is kinda easy to understand the way things should have went. But at the time they were trying to protect their share of the market and there were certainly plenty of people looking to take as much of that share as they could. eg. Chaosium, Flying Buffalo, etc.
That being said. There were plenty of efforts like this item that the high
ups at TSR got a hard-on about wielding power over. As if they would steal TSR's share with such low standards. Gamers are a rough lot when it comes to bizness.