well, the reason I say mostly harmless is this
the overwhelming majority of it, at least in my experience, is fantasy fulfillment and experiencing the world again/more. It's not about the writing, it's about being in a place you love. So if you're talking purely from the standpoint of a person wanting to become a professional writer, then yeah, it's best a starting point in most cases (more on that later).
But most people write Harry Potter fan fiction because they love Hogwarts and all the other hoo ha. They want more to it than the 7 books out there. So they make their own. How is this *any* different than roleplaying in Middle Earth or any other of a hundred other popular settings? Other than it's generally a solo activity and roleplaying is most often a group activity, I can't really find any other important difference.
The same goes for reading it. People read books about Rogue Squadron and the Jedi Academy because they want more Star Wars. Not because it's fantastic writing. Is this a bad thing? I don't really want to do it, but I read for interesting new stories and characters or perhaps some skillful turn of phrase or a thoughtful approach to something. Not everyone reads for that.
Now, I wonder where you consider the line between fanfiction and other literature is. Is Bride of Frankenstein fanfiction? Is Grendel (the story of Beowulf told from the monster's point of view)? What about Mists of Avalon? Are you saying I can't write a Robin Hood story without it being fanfiction? If so, does that mean it's bad just because it's fanfiction? Or is some fanfiction "ok" and other fanfiction not? If so, what distinguishes good from bad.
I don't think that, necessarily, one need ever stop writing fanfiction. Kevin J. Anderson told me over snacks once that he found writing Star Wars books just as rewarding as writing original fiction. Does doing it professionally make it no longer fan fiction? If so, wouldn't writing fanfiction prepare you for writing series like that professionally? If you enjoy it, and can get paid for it, I don't see what's wrong with it. Certainly it doesn't challenge you in *starting* a new set of characters. But every Star Wars book I've read (admittedly, only one other than the old Daly ones) had new characters in new places not previously explored in the Star Wars universe. That right there is doing what any writer does, just starting at another place. And they have the additional challenge of continuity, and being intimate with the setting. If something comes up, they can't just change it, they have to write around it. That requires its own kind of skill and talent.
So, yeah. I don't really like fanfiction myself, but mostly because almost every bit of it I've ever read has been written by amateurs who don't care about skill. I personally don't care to explore more of the Harry Potter world, so that alone isn't enough for me. It is for other people. Is that any less nerdy than arguing whether Logan's claws could pierce Steve Roger's shield? Is it any less productive than playing a 4 hour board game? Is it any more mind damaging than clicking on goobers for night after night while playing WoW? or watching hour upon hour of your favorite TV series? I find that premise hard to accept.
So no, fanfiction is not Evil. It's not inherently bad. Be careful to distinguish your opinion and why you read from an objective assessment of the virtues of fanfiction, because the last three opinions seem to me to be entirely focussed on evaluating it for the poster's own purposes, but pronounce judgement as if it were objective. I don't think there's a problem with posting why you don't find fanfiction worthy of your attention, but that doesn't mean fanfiction isn't worthy of *anyone's* attention.