Meh, I find it sad to see so many comments saying they avoid it at all costs, because 'They've heard it's all really bad'. Are people so unable to form their own opinions on things these days? Also, why anyone would ever base an opinion of an entire subculture entirely on the reading of an example that is always held up to be unarguably the very worst example possible, completely eludes me.
No, not all fan fiction is bad. A lot of it is atrocious, yes, but it really isn't hard to avoid the bad ones and find the good ones. A bad fanfic is generally obvious in its blurb, and good ones equally so. It's not the needle-in-haystack ordeal that people claim (and for the most part, people who also claim to not read fanfics... so pinch of salt for what that analysis is really worth...)
I avoid bad fics like the plague, (As far as I'm aware, for example, there has never, ever been a good Mary Sue or Gary Stu that was even remotely enjoyable for anyone other than the author...) unless I'm in the mood for a laugh, but consider this: Have you ever played a game or read a story, and when all said and done, you find yourself liking the characters therein enough that you really would like to see more of them, or to see bits and pieces that, though alluded to, the story never covered? Most people have at some point. Writing fan fiction does not necessarily display a lack of creativity, though again, in the case of the bad ones, it usually does; writing a really good story within the framework and lore set out by someone else, and making it feel real and genuine is often harder work than creating your own original short, and it takes a deal of creative process, coupled with a close understanding and appreciation of the universe in which you are writing.
This is where the root of a good fanfic can start, and in the hands of a decently talented writer, you can get some really great material. Anyone can toss out a passable original short story. Not everyone can write an enjoyably good fan fiction.
Now, I'm an author, moderately well known, I'd like to think, but at least well read enough that that is my career, and how I make my living. I also, when I'm not working, write fan fiction for a few of my favorite stories and universes, under a pseudonym... the sort of smutty stuff I could never get away with writing publicly without changing my reputation.
I guess the point is, though, that it's a really bad idea to base your own stance on something in the outright negative, when you yourself have never had any experience with it. Most opinions I've read here, for example, display a grossly inaccurate and distorted view of what the fan fiction subculture is like... If it was like a lot of people (who claim never to have looked into it) here are saying, then I'd avoid it like the plague too... but it isn't.
Tl;dr: Only halfwits spout the poorly formed and ill informed stances of other people as their own without any sort of personal grounding to base it in.