So, there's several places in gaming where GM fiat can happen. Like, in D&D, adventure design is a ginormous wad of GM fiat, but we typically ignore that when we talk about fiat.
I don't think you should. I think it is very important to call out that in traditional play, the GM's fiat is mostly intended to be spent in the preparation for the game. The GM, by fiat, creates a scenario that he intends to be balanced and corresponds to some concrete reality - "this is the way". Then the expectation is that having spent that fiat before the session, his preparation becomes a constraint on his arbitration within the session. He's expected to treat his preparation much like a contract between himself and the players, and although since he's the secret keeper the players can't really know when he breaks that contract, he his supposed to view breaking it himself as a sign of his own failures in preparation and resolve to do better. In other words, the fiat in traditional play is moved into the preparation phase as a way to limit it. It's intended to prevent the GM from using fiat to produce his own preferred outcome at all points in the story. That is the GM is not supposed to use his omnipotence to create whatever situation he feels is needed right then. He is supposed to let it play out the vast majority of the time.
Whereas FATE very much encourages the GM to flex his omnipotence during the game to create obstacles and problems in response to the players efforts. In D&D, creating new resources in order to keep alive a favored NPC villain is considered bad form. In FATE, it's considered normal and even encouraged.
Player control over the narrative therefore depends not on the game, but no an on going metagame conversation.
By and large, a Fate GM is best off saying "No" only when what the player proposes is widely out of line for the genre or established narrative. The game is highly suited to "Yes, and..." approaches to play.
Personally, as a player I find no real distinction between "No" and "Yes, and..." except that "Yes, and..." feels far more frustrating and adversarial to me in practice. Consider the two scenarios:
Player: May I have a cupcake?
DM: No.
Player: Alright, may I have a cookie?
Player: May I have a cupcake?
DM: Yes, and when you take a bite out of it, it has live roach in it!
Player: I think I'm going to skip the cookie.
Moreover, I can give some push-back on much of that being arbitrarily deciding outcomes. D&D task resolution has two states - success and failure. Fate has failure, success with consequence, success, and success with style.
In practice I find that this simply allows the FATE GM to decide whatever consequences he wants based on his arbitrary definitions of the above terms. In most traditional RPGs, the rules present a sort of contract the specifies how the fictional positioning will be changed by your success so that you know if you ask for a cookie and pass your fortune test, you will at least get a cookie. But in FATE...
In success with cost/consequence (in other systems as well, not just Fate), the GM is supposed to add content to the situation. It is NOT actually arbitrarily assigning an outcome to the task at hand. If you are trying to pick a lock, and you succeed with a cost... that lock is still well and truly picked. That outcome is what it is.
As you say, I never know what I'm going to get. The lock may be well and truly picked, but because it is "success with a cost" the thing I may get with my cookie may in fact be much worse than not getting the cookie at all. And since the GM is empowered to impose this on the fiction based on his whim and not his preparation, I can literally find myself in circumstances were "success" feels worse than defeat and my relationship to my character is actively harmed and my larger goals impeded in a way that "the lock doesn't open" would not. In requires very much letting go in my experience of actually caring about what happens and just going with the flow.
However, the GM is now also supposed to add something that makes life more difficult - like a guard coming down the hall. This is NO LESS FIAT than a D&D GM deciding in their adventure design that guards come down the hall every 5 rounds. It is just that the time that fiat is made is different.
But when the fiat is made actually makes an enormous amount of difference in terms of the GMs stance as referee and arbiter. Making the guards come every 5 rounds puts a limit on the power of the GM in terms of how present and numerous the guards are. If I can decide, "Well gee, this corridor needs guards to be here." during the running of the scenario, there is actually very little narrative force I have to yield to the players at all.
This becomes more clear when you realize that a skilled Fate GM is not stipulating much in their adventure prep. In Fate, the GM has a sketch by comparison to a typical D&D GM, knowing that the system is going to add in loads of opportunities to add content later, as part of the process of play.
Yes. Yes, very much. Roaches in my cupcakes, for example.
I cannot speak to Wil Wheaton's experience, specifically, as I have not seen it.
I don't know Wil and have never wanted to really, so I can't speak to it either. But Wil has a "face like glass" that I think is very easy to read, my reading of him was that he was often frustrated. Wil built his first FATE character and he decided that he was going to be the party muscle as it were and he invested hard in combat skills probably with the expectation that he would then get his spotlight in combat.
But what he experienced instead was being utterly useless in combat because a player with system mastery knew that in FATE how effective you are in combat is largely determined by how effectively you can make calls and convince the GM you are cool. In other words, your personality as the player is the biggest combat advantage to you because GM is so powerful and the game is geared to entertaining the GM if you want to succeed at anything. So what happened is Will found himself continually overshadowed as a more experienced player made calls that the GM's creator liked and allowed him to stack massive stacks of dice on his combat actions.
I can say that many people familiar with traditional games, in which the character sheet dictates some very specific and fixed abilities you are expected to use, can have issues when approaching the open and narratively-leaning Fate.
Yes, that's one way to put it.
But the other thing that I got out of watching that session was all the roaches in the cupcakes. It was all the times that it was "Yes you succeed, but I really don't want you to win that easily so lets invent a new problem" or "Yes you succeed but it comes at the price of your immortal soul" sort of things that for me would represent I never would have imagined was at stake in the proposition to begin with and which would not have been in Trad play.
