The only argument against fate seems to be the reduced probability of being turning into a frog.
Otherwise, fate seems like a pretty good idea. It further differentiates the characters (some characters have no fate, while others have a lot), it shortens the game, and gives players a little more control/strategy in a game that is 99% randomly determined. For instance, I've always found the troll a little overpowered at the outset of the game, but the T4rev doesn't give him any fate points, greatly decreasing and balancing his power.
It would be sad if the fate rule negates the frog, especially since FFG have introduced the nifty plastic frog figure. I think they should have increased the probability of turning into a frog to offset the fate effect. Of course, there's nothing stopping you from saying that fate doesn't work on the witch.
Here's an idea... make a house rule that the person sitting opposite your character roles for the witch, in the same way that they role for your monsters in combat, thereby illiminating fate points as an opinion.