@surreality
If players are actively bitching out another player or the ST (openly or not) in the middle of a plot, something is wrong with the flow of the plot. Engaged players will be busy thinking about how to salvage the situation or turn it to their own advantage ICly if the opportunity is created correctly.
Can players be bitchy, catty assholes? Absolutely.
Do they complain less when they're having fun? Definitely.
Can they have fun even when they're failing? My answer to that is hands down, yes.
This seems to be where you and I differ, @surreality , because my experience was that an engaging storyline would keep players, well, engaged and coming back even though one or two characters might have (quite often) made terrible decisions. I did see players choose to take dramatic failures and I didn't see people bitching about the OOC choice to do so (which may have just been me with the blinders on, but I'm judging mostly by the fact that they came back for more.)
Shaping OOC attitudes is to some extent in the hands of the ST.
I absolutely think wildcard characters and characters who fuck up make things interesting. I think wildcard characters create unexpected situations for everyone that can challenge problem-solving skills and encourage lateral thinking. It's the stuff of storytelling to deal with flaws and the unexpected, and even the winnering types of players can find these types of situations interesting if they're challenged to solve it and get rewarded at the end of the process.
This is a very difficult thing to learn as an ST, and I certainly don't claim to have mastered this talent, but like I said originally, I think the missed opportunities in negative condition resolution is a ball best resolved on the ST side of the court.
In many of the types of plots I've experienced, here are the common problems with STs addressing bad outcomes:
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Railroad plots. There are one or two set ways to solve the plot, and the ST is inflexible about handling it. Due to the way this type of plot is written, failure will result in a dead end regardless of whether it is a rolled failure or not, leaving a player no choice but to go back to square one and try another option. This is a highly frustrating type of plot from the player side, and if multiple players are involved, bitching is likely. Because it's already likely, choosing to take a dramatic failure or resolve a condition in this type of plot is basically a free, very boring beat.
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Combat one-shots. This type of plot has mixed results for a variety of reasons. Not all PCs are created equal and not all MU*ers prepare for combat plots even when they sign up for them. Player STs often cannot see sheets of participating players in advance (and may not even know who's showing up) and therefore cannot design combat antags for them. Taking risks (dramatic failures) in these types of plots can be a bad idea, and are difficult to handle from an ST side. If you dramatically fail a clairvoyance roll, an ST has a lot of potential story to throw at that, but with a dramatic failure on a roundhouse kick, what kind of story can you throw at it? "X PC puts his weight down too soon and with a sharp horrible crack and a sudden stab of pain, he buckles to the ground, finding a gleaming white piece of metatarsal bone sticking out of a gushing red gash on his left foot. Take the leg wrack tilt." A bunch of mechanical stuff that can't really be handled within the scope of a one-shot. BUT! This can have pretty interesting ramifications on an extended plotline which if properly handled can engage the rest of the players on this plot.
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Splitting the party. I definitely concede this is an issue with certain types of conditions, but still can be handled by a good storyteller who knows their limits and doesn't try to juggle too much at once.
Players are free to act as idiots as their characters. It's the storyteller's job to capitalize on that idiocy. Yes, there might be a few oddball players who will never use conditions properly, but I guarantee you most would if it got them an engaging story in return. (It might take them a few tries to get used to it.) The problem with 1e was that no one failed, ever. You never saw the WoD equivalent to DnD 1 unless STs stacked on several penalties, which was pretty rare in my experience. What does never seriously failing do for story arcs? It makes them pretty uninteresting. Giving a beat for dramatic failure means more players are willing to do it, and if it ends up being an uninteresting failure, that's sort of the STs fault (unless it's a no-ST scene, in which case, well.)