Denis McGrath has an entertaining rant against fanfic.
Unlike most anti-fanfic posts, which are based on the dubious premise that fanfic violates the rights of the creator (so why doesn't a spec script violate the rights of the creator?), Denis's argument is that fanfic is badly written and stupid, which is a more legitimate argument.
I certainly don't think most fanfic -- including my own occasional attempts -- is very good, though I will say that I have seen plenty of fanfic that is no worse than the average spec script for the same show.
But here's a question: can you name any actual good fanfic? That is, fan fiction you think qualifies as good storytelling in and of itself?
I sometimes think that could apply to some of the stories at the Batgirl Bat-Trap Homepage. Though it seems to be part of a fetish site (about Batgirl being tied up and the like), and though the prose in the fanfic is kind of over-ripe sometimes, some of the stories aren't bad. And if you read enough of them it really does, in a weird way, come to feel like the author has enriched and expanded the '60s Batman universe for the better. It helps that the author has, instead of just writing straight-up Batman stories, writes stories focusing on an under-used character (Batgirl) and creates a new universe of characters to back her up, even while the main characters of the original show still have a lot to do.
That's the most legitimate use of fan fiction: creating stories that the original show would not have done, with characters who weren't the stars. In that sense, Rosencrantz and Guildenstern are Dead is the greatest fanfic of all time: it's a Hamlet fanfic that turns the spotlight on two under-utilized characters from the original play. And what's wrong with that?
I also think that, quality aside, fanfic is an important part of a show's fan community. Writing a fanfic is a way for a fan to express his or her take on a character, or the show's premise, or the way it's developing. It may not have value to someone outside the fan community. But within that community, you can look at Fan X's fanfic and understand, better than that fan could put it in non-fictional prose, what Fan X thinks the main character wants or where that character is headed. I never got strongly into the fanfic culture, but when I was a poster on alt.tv.animaniacs a decade ago, that group would have been much the poorer without the fanfic, in-character songs, in-character skits and much more created by fans. Heck, my first post on that group was a fanfic where Chicken Boo was Sweeney Todd, complete with song parodies (London was OK with him cutting up his customers and making them into pies, but they turned on him when they discovered he was a giant chicken). That's just part of what being a fan is all about.
Your choices for good fanfic?
Update: McGrath responds here; I don't have much to argue with in this post (yes, "overripe prose, and the weird, slightly fetishy sheen" are indeed an off-putting part of almost all fanfic).
There's actually a reason why someone might turn their energies toward fanfic instead of coming up with original stuff, and one of the commenters over at McGrath's blog implies it: coming up with good original characters can be really hard. And without good characters, it's harder to do good writing.
So for some of these fanfic writers -- and we're talking people who do it for fun, not professionally -- it's easier to start with clearly-defined characters and setups that someone else came up with, and build from there; the stories and dialogue flow naturally from that.
I remember years ago I started to write a fanfic for a now-defunct hour-long action-adventure show that shall remain nameless. I'd gotten up to like 10,000 words when I stopped, and I stopped because I realized I was putting all this energy and work into a fanfic that I should be putting into real writing. But it was so much easier and more fun than real writing, and that's because I knew who the characters were and didn't have fo "find" them in the writing. I still think those 10,000 words are some of the funniest writing I ever did (not that that's saying much).
Of course it's not the same caliber of writing as original writing, nor even a spec script. While a lot of specs are bad, they do require one thing that fanfic doesn't, and that's discipline. A spec script not only requires that you format the text properly, but it requires you to fit everything into a set structure and a reasonable length (meaning you can't write endlessly long scenes or wander away from the plot for thousands of words). But of course that's another reason why people find fanfic enjoyable to write, that it's free from the constraints and disciplines of writing a spec.