The use of laughter in a show in order to foster laughter in a watching audience is at its best when used the least. Shows where you rarely hear the laughter or that use it sparingly are much better then those that rely on it too much. If saved only for the best, it is more subtle and more effective. When used too much, it becomes noticeable, distracting and grating. When used rarely, it feels more earned and is more effective, people aren't expecting it as much so the contagious nature of laughter can work better. I don't differentiate between a live audience and canned laughter much either, since live audiences can be prompted to laugh at certain times and it does the same job as having per-recorded laughter, with the same pitfalls involved with over use and poor handling.
When the laughter overshadows the jokes or the characters, your show has a problem and is most likely shit. BBT comes to mind as a show over reliant on it, but many current sitcoms seem to have that issue.
And again, I don't care if live audience or recorded laughter. When you can fill a studio with easily entertained jackasses who can react on prompt or who are conditioned by social pressure into laughing at every joke (a few paid audience members laugh on cue, the rest laugh with), then the effect as someone watching the finished product is the same as just having prerecorded laughter.
Honestly, I say get rid of it entirely. I don't need nor want to listen to other people laugh at bad jokes or physical humor any more then I would need or want to listen to an audience in a current Adam Sandler flick (should I somehow be forced to watch one in the first place). If the show is funny, I'll laugh. If not, I don't want to feel the twinges of social manipulating tv execs trying to force me to think it is funny because they have a room full of people who do laugh at it. Honestly, it comes off more as the people making the show trying to manipulate people into like it rather then, you know, making a good show in the first place.
