Dominion can get away with using Leon in the same way that, say, a fanfic or a piece of fanart can be done...he's not making money using Capcom's intellectual property and he's not causing them to loose money. So Fair Use Laws allow him to do it, rather like Brian Clevenger and 8-Bit Theater.
As to the rest...well, it wouldn't take Capcom a lot to release 1.5, assuming they still have the assets locked away in there evil vault of evil. It's not beyond possibility that it got lost/deleted. Problem is, they don't want to. They think it will harm the franchise, apparently. How, therefore, Gaiden ever saw daylight I can't begin to imagine...
As to the rest...well, it wouldn't take Capcom a lot to release 1.5, assuming they still have the assets locked away in there evil vault of evil. It's not beyond possibility that it got lost/deleted. Problem is, they don't want to. They think it will harm the franchise, apparently. How, therefore, Gaiden ever saw daylight I can't begin to imagine...
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