Yeah, I get the impression that JMS's attitude towards Babylon 5 has always been along the lines of "better no product at all than a shite product." He did let others write the novels, but it quickly became apparent that without direct oversight, the quality of writing and even the faithfulness to the spirit of the source material *really* suffered. As soon as he became more directly involved with story assignments and vetting authors, the quality improved drastically.
The only other officially licensed fiction of note since then has been the Mongoose books which--based on the odd samples I've read--were utter garbage. Not surprisingly, JMS had little to nothing to do with it and appears to have later disowned the entire body of work.
So yeah, while having a multitude of talents free to explore and innovate has been good for some IPs, something with as singular a vision as B5 really needs it's creator to at least watch over it.
Also, let's be honest, while there are indeed some gems in there, 90% of the Star Wars EU is disposable rubbish *at best*. Likewise, I don't think there are very many *good* licensed Star Trek novels, comics, games etc. Most are just OK and very few do anything really different with the IP.