I am not the biggest fan of fiat abilities, because I think dice rolls produce a more compelling pattern of success and failure (Robin Laws calls this the pass/fail cycle, and suggests that it is inherent to all stories). But where fiat abilities are tightly rationed (eg as is the case for Prince Valiant Storyteller Certificates), then they allow the player to really stake their claim - This is where I care, and will produce the outcome I want!
In the context of 5e D&D, the "rationing" consists in being able to choose only one background, and having the fictional circumstances that enliven it be reasonably narrow. I think this design is less compelling than Prince Valiant, as the player makes their choice at the start of play and in anticipation, rather than at the moment of truth as happens i Prince Valiant - but this would just be one way in which D&D design tends to favour "comfortable" over "compelling", and probably not the most invidious.