Both. Everyone is there to have fun. It's a group activity. Everyone's fun is dependent upon the cooperation of everyone.
That said, the GM has certain responsibilities that require both the ability to make rules-calls without involvement from other players, and the ability to build from assumptions or within boundaries to form a coherent game. The former gives the GM the authority to arbitrate the rules and to not be called on the carpet for them. The latter give the GM the authority to set boundaries on things like character creation (all PCs must be part of the king's guard), genre specifics (no firearms), etc.
That doesn't mean players should just suck it up and accept whatever the GM does. If people aren't interested in playing noble knights, then the whole group needs to decide a more acceptable setting/baseline for the game. If the GM is making lousy calls that consistently put the players in unfun scenes, then it's fair to bring it up and let the GM know that the game needs to be loosened up a bit.
Regardless, the big thing is respect. The GM needs to respect that the players aren't there to sit in awe of his masterpiece or listen to his pronouncements. The player need to respect the fact that the GM is putting in an aweful lot of hard work for their amusement -- even if using a published module/setting and the RAW, the GM has a serious amount of data to track and decision-making.
I'll comment on house rules, though. I used to have tons of house rules. There have been multiple things about every edition that I thought could be done better. Most of the house rules I made, though, didn't really improve the fun to be had, especially by the players.
House rules will always be more intuitive to the person who make them. They also tend to be marginally documented. Most players (IME) don't read the PHB cover-to-cover. Even if you have the best laid out house-rule document, your players are unlikely to read it, or maybe even notice it. Even in the best case, you have an extra reference that is going to provide a potential for misunderstanding, especially if the rule is rarely used or only changes for certain circumstances. Spell points are easy to remember. Changing the protection afforded by non-magical, masterwork, metal armor is almost pointless. House rules that appear and/or disappear will frustrate even the most flexible player.
I've really started scaling back my house rules to just those that make the game noticibly easier or more fun to play. If I had my druthers, and was inclinded to run another 3.5 game, I'd make very few house rules, and I'd keep those to published alternatives (UA) that are close enough to what I'd do on my own (spell points and action points, really).
House rules aren't inherently evil. Chronic system tweaking, though, will kill most groups.