In FATE, some highly important chunks of the mechanics require the application of natural language descriptive phrases to in-game situations. Since we are talking about natural language, and not game-jargon, GM arbitration is required in the game pretty constantly. This is not "edges and corners" - this is central to the game's operation. If this is instantly an issue of "here there be dragons", FATE games should, as a matter of course, go up in dragonflame, as the game has you stomping around on the horde.
Oddly, they don't go up in flames. Oddly, this game with loads of GM arbitration in its rules has, by reports, sold pretty darned well for something not published by WotC or Paizo.
It is a real question for me. Which explains why my basic read through of FATE didn't leave me enthusiastic. It's likely also my same problem with Marvel Heroic RPG.
As I said in my post on the first place, extremely vague rules tend to drive me completely bonkers.
I think that comparing Fate or MHRP to D&D just brings out how different many of the system assumptions are.
For instance, in D&D the default consequence for losing a conflict, or even a check of any significance, is PC death. (In modern versions of the game, it might instead be a step on the way to PC death.) PC death, in turn, is pretty typically experienced as a "loss" condition among D&D players: you can roll up a new PC, you might even get to rejoin the party in the same adventure, but you're not doing as well as you might have in the game.
I think part of what opens up Fate and MHRP (and Burning Wheel, and HeroWars/Quest, etc) to more GM adjudication is that they all stress "fail forward", and hence don't have such a strong correlation between losing a conflict or check, and losing the game.
Another thing these non-D&D games tend to have in common (BW is a bit of an outlier here) is non-sim, non-process oriented resolution systems where - once the system is in play - the players have mechanically-underwritten abilities to change the fiction in meaningful ways. So the connection between GM adjudication and player agency is much looser than it is in White Plume Mountain or ToH-style D&D play.
4e D&D can be pushed in the direction of these sorts of games, but only by playing up all the most contentious aspects of the system (skill challenges, skills as loose descriptors, player protagonism in combat via the non-sim action economy, etc).
For a game like traditional D&D, I can see how and why GM adjudication has to be handled with care. (Which isn't to say it's out of line. But it's a more delicate matter than in Fate or MHRP that is much more likely to blow up in the GM's face.)
I will give and example which perhaps spawned the idea. The charm person spell. It says in plain English that it changes the target's reaction to friendly acquaintance.
Now a totally incompetent one could adjudicate that a friendly acquaintance might allow his friends into the bedroom of the King who he is sworn to protect. They just want to gaze upon royalty is their reason. I believe such a ruling would indicate incompetence on the part of the DM. Just because you are a friendly acquaintance you would not totally abandon duty.
Another example. Suppose my character enters a store and we cast charm person on the owner. I then state I am asking the owner for a free bottle of his finest ale that costs like 25gp. The DM that gives him the ale is an incompetent DM. Friendly acquaintances don't just give away things that cost such a massive amount of money from the eyes of the proprietor.
Both these examples are extremely contentious. How many people, over the course of human history, have abandoned duty for a friendly acquaintance? Whether by telling lies, or corroborating lies, or whatever.
When I was a parliamentary officer with my state Parliament I once took a friendly acquaintance, together with her friend whom I'd never met before, through the chambers, I'm pretty sure in breach of the guidelines that governed my access to those places, because it was a chance to show off a bit and spend a bit of time with them. Would I have let them in to look upon the face of the beatific king? It's hard to tell, but perhaps. It's certainly not outside the realm of conceivability.
As for your shop keeper bestowing gifts upon his friendly acquaintances, again this is entirely a matter of personality (and to some extent culture). Some people are extremely generous to their friendly acquaintances; others are not. In Gygax's DMG there is a calculable % chance that an NPC will risk his/her life for a friendly acquaintance (it's part of the loyalty mechanics).
Whether or not a charm person spell along the lines you describe is a bad rule for me would depend on how robust other parts of the social conflict resolution system were. But the idea that a GM who would rule contrary to you is incompetent is not one that I can remotely agree with.