I play RPGs as games of strategy, which makes "fudging" very frustrating. As an experienced chess player, I have learned to calculate the points on the battlefield and plan my strategy accordingly, making sure I have the power to force a stalemate if things go poorly.
Two examples:
Once we were in a fight (D&D) against 100 goblins. Every turn four more arrived, and every turn we killed a dozen or so. We wanted to search the area, and when I reasoned out loud that eventually we would wear them down and only face a few every turn, my GM overheard, and suddenly 10 goblins were appearing each turn. Not fun.
I created a monk that could blow all of his powers at once, and be spent for the day; however, in the process, he would deal insane amounts of damage. I waited very patiently for an opportune time to do so. When we came across a giant poisonous solo beast late in the day, I decided to blow my wad, and test my limits, killing it in one round. My GM, disappointed at the quick loss, quickly explained that two more were coming through the trees. This left us worse off than if I had spent none of my powers, and cheapened my characters tactical presence in the fight.
Ultimately, I think it depends on the group. If the group wants to role-play, then fudging is fun. If the group wants to analyze and solve problems, then the elements on the board need to be relatively static and predictable.
Lastly, I must admit, I have seldom frowned upon a small fudge in the party's favor.