Yes, the de la Poer/Poe/Power (the person who brought up the fact was the woman he was courting, the poetess Sarah Helen (Power) Whitman) connection was known to HPL, who had read quite a bit on Poe's life over the years; he was, as I've mentioned elsewhere, more than a bit of a Poe scholar himself, resolving some puzzles for Poe students that had remained since the earlier writer's death.
As for the letters/stories controversy... it's actually rather unlikely that we would have much more fiction from him. He wrote when (as Godwin put it) he was seized by "the afflatus"; if something didn't fire him up, he found it near impossible to work with any material -- the two major exceptions being the series now known as "Herbert West -- Reanimator" and "The Lurking Fear", both of which are among his poorer works.
Also, his letters were vital to his growth as a writer and thinker, as he discussed and debated so much with various people from all over the world, honing his critical faculties and his writing skills in doing so, as well as expanding his literary horizons and giving his work more depth. This is one of the reasons why his work still provides such a rich experience today, whereas so many of the professional writers for the magazines of his time, though often great fun, are rather shallow in comparison in so many ways.