Just so I understand what you're advocating - you're advocating that, if I, an artist, drew a picture of Mario from Super Mario Brothers, I should be able to sell that picture on some sort of physical media (button, pin, etc)?
Also, this is a thing many people already do, so I'm really advocating that it's fine for them to continue doing it.
It gets stickier when you dive into other types of derivative work. Let's say you write a book and I translate it to Spanish. It's my translation of your story. Based on your framework, is it okay to sell at conferences in paperback form? If not, how is it any different than drawing a character I created and selling it on buttons?
I look at a translation as like a tracing of someone else's artwork. Not an original drawing of the same character.