What's wrong with the nominating a fan film series?
Let me put it this way:
Should the Nobel Committee nominate a work of fan fiction in a field that's competing against professional literature? No, of course not.
Would you put a fan-written and produced sequel to Les Miserables
up for a Tony? No, of course not.
Because the standards of quality are completely different, and because it's inappropriate to nominate an unauthorized, unlicensed work of fiction based upon someone else's copyrighted work up against original copyrighted work.
If the Hugos want to be in the business of nominating fan films, or CGI characters' awards acceptance skits, they should create a "Best Fan Film Installment" category, and a "Best Genre Short" or "Best Genre Skit" category.