although it's worth mentioning that Methods is arguably as much an outlier in fanfic terms as your average bestseller is in publishing, and retroactively extrapolating from its performance might not accurately model the kind of forward prediction that Eliezer would actually have been doing when he was making these choices.
I think it pretty obviously does not accurately represent the choice Eliezer faced at the time. Aside from the inherent advantages of fanfiction (no barriers to entry for him or readers, close interaction with readers so he can debug chapters), there are who knows how many thousands of high-quality fanfics he was competing with? It's worth noting that Eliezer has done a fair bit of original and fanfiction before (http://yudkowsky.net/other/fiction) and AFAIK none of them have been wildly successful even when you consider them being short stories etc.
"The kind of classic fifties-era first-contact story that Jonathan Swift might have written, if Jonathan Swift had had a background in game theory."
-- (Hugo nominee) Peter Watts, "In Praise of Baby-Eating"
Three Worlds Collide is a story I wrote to illustrate some points on naturalistic metaethics and diverse other issues of rational conduct. It grew, as such things do, into a small novella. On publication, it proved widely popular and widely criticized. Be warned that the story, as it wrote itself, ended up containing some profanity and PG-13 content.
PDF version here.