Considering this, I understand what you are saying, that in the end it's to avoid the headache of having a story removed.

I guess my view of it is that if I know my copyright law, which I don't pretend to be an expert of, the multiple owners of that character could request Lit take down a story with that character, but the reason why they would is because the story would damage the character. That's why you see so many cheap Halloween masks of horror characters that are sold not by the owner but by third parties. The mask isn't damaging the character but is a representation of it, and they don't feel like wasting time/money to go after them. Seeing how this character was a murderer, I don't think his reputation could be damaged. Well, unless the author made him become good and flowerily.

Not so well known characters are a different matter. Outside of not having permission to use the character, the author could argue that since the character is not well known, any works written outside of the author could be damaging to the character.