I would add, with a small note of cynicism, that Gaming Fiction tends to be bad relative to Normal Fiction, because Gaming Fiction Writers are bad relative to Normal Writers.
I am so very extremely not saying that every Gaming Fiction writer is bad, or that every Normal writer is good. But if you take the work of most of them and filed off the serial numbers and tried to sell it to Tor or Del Rey or any of the other publishers, do you think they'd have a chance? In most cases, no. In most cases, the guy gets to write a book because he wrote a number of very good modules, or a core rulebook, or something like that, and he doesn't suck as a writer, and the game publishers think "Hey, it'll bring in some more money."
In most cases, Normal Fantasy Writers don't want to get labelled as D&D writers, so if they write gaming fiction, it's under an alias.
Gaming Writers are also working under strict rules, that's certainly true -- you can't have magic be something beautiful or mysterious or, well, inexplicably magic, because the reader will say "Wait, how come I have to memorize my spells and my enemies get Saves, while this guy embraces the weave and automatically hits everyone?"
Ironically, most people end up feeling that Gaming Fiction isn't true to the rules anyway -- the Gaming Writer tries to walk the path between keeping it magical and free-flowing and wondrous and working in a recognized world with recognized rules, and ends up making nobody as happy as if the writer had just picked one way or the other and stuck with it.
In the earlier stories, you had people naming spells more explicitly -- 'He just cast "Hold Person" on you!' and such -- but then they decided to move away from direct game references, despite the fact that that was what people bought the book for...
-Tacky