That sounds like a story I haven't heard.
Hang out in the TrekLit subforum over at TrekBBS and you'll hear a lot of stories about the authors. She always comes up when people discuss their lists of least-favorite authors.
The final straw was a Voyager novel, in which Carey put her own thoughts into Janeway's head. Carey thinks Voyager is a stupid show, so she put all kinds of derogatory and negative stuff into Janeway's dialogue and inner thoughts. When the editors got the manuscript from her, it was too late for the extensive revisions that would be needed and definitely too late to get another author to come up with a book to fill that particular publishing slot. And the idea of outright canceling a Voyager book was not doable; they had slots planned out and the book had to come out. Period.
The only consequence they actually could mete out was to fire Diane Carey as one of their authors, which they did. As for Carey herself, she couldn't care less. She stated that she'd written the book in six days, during her spare time from working as a cook on someone's boat, bragged that the publishers used her as a writer because she could work fast, and didn't seem to give a damn that her book was appallingly bad.
Her TOS books are a little better, since she likes that show and puts her own love of sailing and her political views into Kirk's dialogue and inner thoughts. Her novels
Dreadnought! and
Battlestations! are basically putting herself and her husband into the novels as Mary Sue/Marty Stu characters who are just so damned
good at their jobs (they're lieutenants), can outthink Kirk
and Spock, and she claimed that when the cover art was done for the books, she persuaded the artist to model the characters after herself and her husband (though it should be mentioned that her husband doesn't actually have pointed ears).
I don't remember which Voyager novel it was that got her fired, and frankly, I haven't liked most of the Voyager pro novels. The fanfic is much better, and treats the characters with more respect.
Now if you want my recommendation on which authors always turn out good Star Trek novels, here are two: Diane Duane and Greg Cox. Diane Duane wrote much better Romulans than the ones that appeared on TNG, and explored their culture extensively. She also wrote one of the best TOS novels ever (in my not even remotely humble opinion):
Spock's World.
Greg Cox writes good, straightforward adventures, and did a fantastic trilogy of novels exploring the rise of Khan Noonien Singh, and what happened to him and his people on Ceti Alpha V before the events of
Wrath of Khan. He's a regular poster at TrekBBS in several of the media subforums (he writes tie-in novels for a variety of franchises as well as non-media tie-ins), and is super-nice to chat with.
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