This is interesting, and what you've said has provoked a few thoughts. And I suppose it'd be worthwhile to provide my perspective on this, what with doing much of the writing for Starsector now.
1. I think long-form story writing is somewhat at odds with the goal of creating game content. Like, I could spend X hours writing custom descriptions for the entire contents of a system in the game OR I could write a short story about something - but it'll never appear in the game (unless we contrive some Elder Scrolls-like book mechanic; pay 15 credits for a DRM'd copy of a story on your TriPad? Heh heh). That said, it is cool for hardcore fans to get extra content, it just requires paying dev time for something that doesn't directly contribute to the game.
In this respect it's a bit like promotional art (often, in my opinion, misleadingly called "concept art") - you know, super cool illustrations of game stuff; Blizzard excels at this. But same as above, it's expensive for small teams because any art not contributing to the game is taking away from development. (Happily, with Starsector we use the illustrations in the game for locations, dialogs, events, etc. so promotional art CAN contribute to the game!)
But that's talking about what we can show the public. Behind the scenes? There are a bunch of google docs filled with notes for background info, setting, technology, secret history, etc. I think it's really fun to see players work out the big picture from what they pick up in-game.
2. From a purely utilitarian perspective - put on your space-tie and pretend you're a TriTach executive for a moment - I think it's only hardcore players who would really get value from extra stories. Potential players with no emotional connection to Starsector aren't going to care. They don't know how it feels to fly from Corvus to Askonia smuggling a load of weapons. As much as I'd like to be an awesome writer, they're just going to see some mediocre genre fiction tied in to a game product. ... Unless it's really exceptionally well done, which is difficult and time-consuming, see point about taking away from development.
And at the end of the day, the hardcore players are already hooked. Blizzard lives in a glittering mountain of money so they can put some of their army of artists and writers to making promotional material and fostering an "IP ecosystem" with all kinds of tie-in products, but that's only possible at a certain scale of operations. My conclusion is that its most worthwhile to work on the game directly.
3. This isn't to say that it wouldn't be totally cool and fun to do a short story thing on the blog, maybe even illustrated. Ya'know I dabbled in comics years ago ... man, it'd be so fun. Must stop thinking about it. Need to finish some icons first.
(Bonus phase-stealth point 4: Heck, I should probably go through the mission briefings and tweak them slightly to fit with the updated view of the universe, as applicable - that's all, I believe, written by Ivaylo a couple years ago. I don't expect it'd require much change as it's all set a good 50 'cycles' before the current game time, so the political landscape can plausibly be shifted quite a bit.)