I understand the righteous fury everyone's feeling, but, especially after the reply EvilDM posted, I wonder if their stance on the $17k stemmed from some lawyer employed by the CCF. He might have looked at the standard contract GenCon Ltd. drew up, and some bit of verbiage may have looked to him as though CCF was in some way sponsoring GenCon. (Complete rubbish, of course, but hear me out.)

As satsunada pointed out, CCF is a 501(c)(3) organization; this means it gets federal tax exemption, and must follow certain rules in order to keep this exemption. Not too surprisingly, organizations like this tend to be very careful not to violate those rules. It's possible that that could be the reason; it's possible they had a knee-jerk reaction when the words "Dungeons" and "Dragons" got connected by an ampersand; it's possible there's other reasons for this that I'm not aware of; it's possible that it's all of these to some degree.

The biggest loser in all of this? EGG wasn't able to donate $17k to his favorite charity through the sale of his creations. With luck, the ghost of Gygax will haunt CCF's halls until they not only issue an apology, but the board members all make characters and are forced to play through "Tomb of Horrors" until they all make it out alive.