If a musician covers another musician's song he has permission, either from the musician, or -more likely- from the copyright holder.
Peter Jackson (or MGM or whoever made those films) had permission from Tolkien's estate.

Guess who is also making money there?

This kid just took the ideas that he admits he saw lying around and constructed his own easy digestible version of it.

He's being published because he was a teenager when he wrote it, not because it's a good or original story.
And that should irk some people, like CJ, who are actually competent and original storytellers that don't get published because they are teenagers.