I love reading good fanfiction -- and I've noticed the ratio of good to bad fanfiction isn't all that different from the ratio of good to bad original fiction, although the bad fanction tends to be *very* bad due to a lack of hard-nosed editors. When I come to love a character or universe, I like to explore around in that universe, which is exactly what fanfiction does.
Also, I'm a pretty darn good fanfic writer, if I do say so myself -- but that's where the problem lies. I'm also a pretty darn good original fiction writer ... and the more I write fanfic, the less I'm pursuing my dream of someday getting paid enough to write full time. More than anything else, that's the problem I see in fanfiction. Writers who aren't pursuing that goal should be free to merrily type away, so long as they stay away from those short-sighted creators who alienate their fans by banning the tribute of fanfiction writing.