I think DMs and players have a distinctly different perspective on what the purpose of fudging is for. It seems to me that DMs who fudge think they are doing so in the best interests of The Game(tm). The best interests of The Game may or may not be in the best interests of The Players. It may be to create a certain atmosphere, it may be to cause a specific effect to come about, to avoid a Lucky Roll turning weeks of planning on its head or an Unlucky Roll causing the game to grind to a halt. The Game is more than just The Players in tonight's session. It's the overarching story, the events of the world and yes, tonight's session.
When a DM engages in Good Fudging, that is, fudging that advances the story in a new and interesting direction, fudging that is beneficial to the players or fudging that just generally creates good gameplay, I think players generally don't care. They're either unaware, or if they are aware, agree that it all worked out for the best and we all had fun, therefore it's excusable. I think players tend to forget, or overlook these moments, or even be completely ignorant to them, which in turn leads to the same problem the CIA has, we never know about their successes because a successful secret operation creates an outcome that the generally beneficial for the majority of interested parties.
However, when a DM engages in Bad Fudging, that is, does something that is overtly against the players, or changes the way something they were familiar with had worked before, players take notice and of course: complain. When a "near hit" becomes a confirmed critical, when the enemy escapes their grasp because suddenly their grapple check is 3 points higher than it has ever been before, these cause "problems". Problems is in quotation marks because these things may still benefit the overall story and setting of the game, but they create immediate problems for the players RIGHT NOW. Like most human beings, players are no less short-sighted than the rest of us and problems RIGHT NOW seem much larger and troublesome than certain unspecified benefits down the road. Players may go home disgruntled for the night and write angry complaints on a Message Board, going on about how the DM fudged and how it ruined their game and so on, completely forgetting the night before when the DM fudged and everyone liked it.
Like all humans, DMs also make mistakes. Sometimes fudging can correct those mistakes, sometimes it can exacerbate them. A DM isn't going to get every situation perfectly right and sometimes a well-planned event could become a cakewalk or a TPK and both of those situations could lead to a ruined campaign. The Big Bad goes down a little too easy, the party gets walloped a little too fast, I think every DM has experienced these situations. Sometimes a clever DM (or maybe just a forgetful one) has left a couple of holes open in the situation that could allow for an Expedient Solution, but sometimes there isn't and thus, fudging happens! A quick slip of a roll being one point higher to avoid a grapple that would have otherwise meant certain death so the Big Bad can run away and live to fight another day! Perhaps a downgrade from a confirmed crit into a regular hit so that Bob the Barbarian, who is quite loved by all, isn't transformed into a ghoulish horror that will proceed to destroy the party; thus allowing them a brief moment to retreat.
In short, I feel DMs favor fudging because they see the big picture. Players dislike fudging because they don't.
