alt Hacker NewsThat's just not true. Off the top of my head: SMBX, Pokemon Uranium, Ocarina of Time 2D, AM2R. A few years back they mass DMCA'd hundreds of fan games on the site GameJolt, none of which were monetized.
(why some fan projects like Showdown are still up is anyone's guess)
IIRC Showdown has a tacit agreement with TPC (or at least has historically; unclear if Champions will change anything in the future) and is allowed to exist so long as it follows certain rules. I can't find it right now, but I swear I read a comment from Zarel, the creator of Showdown, explaining what some of those rules entail, including an agreement not to include any moves or mons that haven't been officially released in the mainline games yet.
Other people have speculated that TPC can't/won't axe Showdown because they know that VGC players rely on it heavily to test out team comps before official tournaments, and Champions doesn't seem like it fills the same niche, unless TPC is suddenly about to change their stance on genning :P