Celebrim
Legend
I don't want to turn this into an edition war, but it does seem to me that the 1E rule set encouraged DM fiat much more often than the 3.5 rule set, thus 1E players had a better time of accepting the scene the DM played out in front of them as opposed to a 3.5 game where players think, "He's just doing that to advance the story. I guess I'll roll with it even though I know I can save the NPC."
You'd think that, but in my experience - not so much. Let's keep in mind that for the most part, KotDT is based off peoples experiences with 1e.
What I remember of 1e was a lot of metagame negotiation and argument whenever the DM ruled on something. When the DM ruled in a way that the player didn't expect, it triggered a debate over whether the DM's ruling took into account all the factors the player believed relevant, or all the rules, or realism. The less DM fiat you have, the more the DM can point to the text and say, "This is the rule I'm using, and this is how I interpret it", the fewer arguments you have. This is especially true because having formal rules tends to make everyone's expectations about how a proposition is going to be resolved synch up. Arguments occur because the player thinks he knows or really wants some proposition to be resolved in a specific way and the DM disagrees. If the player knows ahead of time, "Rule #347 says this.", then the argument probably won't happen.