3) The analogy would be more apt if your question was "should a book be free as soon as the publishers stop distributing it" rather than "as soon as the writer stops writing it", which reads as an exaggerated point to try to sway the audience.
That's not even an analogy. That's a description of the exact situation. Regardless of what we think, the law clearly says "No." As long as they maintain the copyright, it is illegal for anyone else to copy and distribute it, even if they aren't anymore.
Crystalkeep was kind of on the edge as to whether it was copyright infringement or "fair use", since they didn't reproduce large sections of any books. I'd guess that's why it was around as long as it was. Whether it was finally taken down due to a Cease and Desist, or because the person hosting it got bored is anyone's guess.