In a well run game I don't the issue of control should come up. The gameworld and the events being driven by the participants should not conflict with the mechanics used to represent them.
What is happening in the campaign is in fact the game. Whatever rules are used to keep the wheels turning, the game should always take precedence.
Rules are a means to an end, not an end unto themselves. If a rule is no longer serving a purpose in the campaign throw it out or replace it.
Likewise, fluff is also subservient to the game. Aside from providing useful fodder with which we create games, fluff has no more importance than rules unless we intend on writing novels.
The best games feature crunch and fluff both serving thier purpose while staying out the way of everyones good time.
I think there's a danger to simply saying fluff is subservient - you end up with a dry system that has no feeling of inspiration. It works well for old players who have their own homebrews, but I remember being fascinated by the Manual of the Planes and the like far before I ever played.
People are drawn into a system because it allows them to approximate what is happening in their imaginations, which comes from the fluff. When fluff seems to promise something the crunch can't deliver, you have dissatisfaction. But if someone picking up the books feels no connection to the fluff (it is too general, or too bland) they are unlikely to feel any great need to play the game.
Fluff also sells the novels - something that helped TSR survive. I suspect more people will have read R.A. Salvatore's Drizz't novels than will ever play D&D in the future.
There is also the problem that new players will feel a distinction between fluff and the system - as in what the system portrays doesn't seem to mesh with their expectations of fantasy. I was looking through Primal Power today and for the life of me still am not sure what separates a Warden and a Druid in terms of fictional, not game related roles. Shaman is another one that seems to a Druid of a different cloth thematically.
I think there are many systems out there - D&D, PF, WoD, GURPS, and so on - and all of them have some fluff to go along with them, especially the more successful ones.