I have often thought fanfiction would be an excellent mechanism for all sorts of English classes. The beauty of it is the way it incorporates original source material and actual creation of new work. So your Romeo and Juliet example makes an awesome assignment in a literature unit, as a way to explore characterization and style and a hundred other things. Or it could be an equally awesome assignment during a creative writing unit, providing an interesting and engaging structure to explore different aspects of story creation.

Obviously, it would not be a good idea to call it "fanfiction" and encourage high school students to go home and investigate what people are writing in their own favorite universes ("Hey! My teacher just told me where to find all the porn! Check it out--Juliet/Mercutio bondage porn, with whips! Hey, what's 'felching?'") but "Transformative Works" sounds perfectly respectable.