for me, and again, I'm only talking about myself, if the DM feels the need to hide things in order to run an entertaining game, I simply do not want to play at that table. I do not like it. Not that it's wrong or bad or anything like that. It's that it's wrong for me. I don't play that way.
Prior to 4e... and want to pick an earlier edition, but I just can make a case for it ...there was always /something/ that the DM 'needed' to keep secret, even if it was only the layout of the dungeon. Did you spurn D&D all that time?
For me, (and I cannot stress this enough that I'm ONLY talking about myself) fudging like this shows a lack of trust on the DM's part that the players cannot handle certain situations in the game. If the DM truly trusts the players, then there's no need for fudging whatsoever. At least, that's the position I'm working from.
The system and the players both come into it. Players' need to trust the DM, too, especially the more the system Empowers the DM.
If anything, running a game above board is the more carefree way, for the DM. You have rules, you follow them, the players' decisions & the system are all that's responsible for the results. Now that I think about it, that's likely another one of the factors that made 4e so easy to run, something I wondered at, seeing relatively new players transitioning easily to DMing at the time. You don't need to win as much trust, manipulation* isn't such an important part of the play dynamic from both sides of the screen.
[sblock="*cynicism"]OK, I shouldn't have gone there, now I'm going to sound pretty awful for a minute: What I've been talking about with 'taking resolution behind the screen' and 'not sharing all information' and 'placebo rolls' and so forth, even as I've been insisting that 'fudging' and related DM techniques aren't in any way 'dishonest,' has still been about manipulating the players. Hopefully manipulating them to have fun in spite of themselves, but still, manipulation. The same goes in the other direction, the more Empowered the DM, the greater the payoff to the player who can win the 'manipulate the DM' metagame. [/sblock]