Don't get me wrong, I adore Fred. I adore the Fred in "The Magic Bullet" who used her brains and her little bit of fighting skills to protect herself and figure out how to undo Jasmine's spell. I love when she and Willow flirt. Heck, she made me cry after Gunn's psuedo-break up with her in "The Price."
The inherent problem with Fred is that she is a Mary Sue.* Joss has been quoted as saying that Fred is his ideal woman. Now obviously no one would ever refer to Joss as the typical man. This is why when Fred is in the hand of other writers, she can grow as a character and do non-Mary Sue activities such as killing the professor who sent her to Plyea. Now it can be argued that Joss was the one who allowed these changes in Fred since he approves every script or that the "Home" mind wipe erased Fred's confidence. (But it didn't erase her break up with Gunn.)
I know that I'm extremely bias and that my favorite season of AtS is Season Four, and in both Season 4 and Season 5, my least favorite episodes of AtS are those written by Joss. While he was busy with Firefly and ending BtVS, Joss' AtS characters - at least the majority of them - grew beyond his writing and understanding. (Though I still think he was one of the only writers who knew what to do with Lorne, and I give him props for that.)
Attire -
In Season 5, Fred's outfits were inappropriate for the office, and inappropriate for Fred. This command to make Fred ‘sexier' came from the ubiquitous ‘they' meaning the network heads. The sexing up of Fred was no doubt because every other main female character was dead. In every other season, Fred's either wore longish dresses or pants and t-shirts. But suddenly, she's in mini skirts and tiny tops. Not something the head of Wolfram & Hart's Science Division should be wearing. This is not saying that the nerdy science girl can't be sexy, just that it doesn't fit the established character of Fred. Her outfits are teenage girlish and give her the appearance of a ‘virgin' schoolgirl.
Damsel in Distress -
In previous seasons, Fred has fully defended herself and even taken revenge, but besides ghost Spike, Fred is arguably the season's only damsel in distress. She's saved by Wesley twice in "Lineage." Not to mention that "A Hole in the World" was the blinking red light of Mary Sueish when Angel gathers the boys to discuss their strategy on saving Fred. Fred had not one Champion, but two, not to mention three other heroes who were willing to do anything - well almost anything - to save her. Her entire "I walk with heroes" speech lends itself to her damsel in distress status. Granted, she did try to work out her own cure, but her knight (Wesley) convinced her that others could do it, and she gave in.
Fred's Romance with Wesley -
Wesley was cast as the archetypical effeminate male character. (The Brat Queen did a lovely essay on this – Wesley, not canonically gay, but a hell of a symbol.) Unlike most television shows and movies, AtS as a show - mostly through Angel - didn't make fun of Wesley's effeminate behavior. And when Wesley went dark (hyper masculinity), the other characters thought less of him. This is a wonderful subtextual statement that ME made. However, adding Fred as a romantic interest to the equation royally fucks things up, making Wesley fans, especially slashers and Lilah fans, incredibly mad at Joss.
In addition this turns Fred into more of a Mary Sue. She becomes the woman who saves Wesley through her magical woman touch. Because Wesley ‘loves' the woman who he views as this wonderful, praise worthy ‘virgin,' his redemption comes through her. This has been done through the ages, and I'm sure we've all heard when a man comes out that ‘all he needs is the love of a good woman' or that he hasn't met the ‘right woman.' And this redemption makes we the viewers forgive him for his past sins. (Does anyone remember Justine locked in his closet?) It also turns Fred in the ‘right woman'; Mary Sue's always the ‘right woman.' And it turns the show's acceptance of the effeminate to the stance that Wesley finally met the ‘right woman.'
The Fred and Wesley romance is not a tragic romance like Romeo and Juliet, but it's a tragedy. A tragedy because it corrupts the storylines and characterization of two characters who have grown throughout the years, reducing them back to what they were – Fred as the damsel in distress and Wesley as the effeminate male, though now saved through Fred magical woman touch.
Oddly enough, both Fred and Wesley were at these places in canon when Joss let AtS grow without him. Despite the themes and genre of his shows, Joss has a hard time playing in the muck, thus causing Fred Sue and straight!Wesley**. I believe Lilah said it best – "Funny thing about black and white – you mix it together and you get gray. And it doesn't matter how much white you try and put back in, you're never gonna get anything but gray" ("Habeas Corpses").
*My definition of the Mary Sue: Mary Sue is a character who is written as the ideal character or ideal romantic interest for the writer. She (or he) either saves the universe from everything that is wrong or is saved themselves and often dies in a tragic way, which greatly upsets every other character.
**By straight, I mean heteronormal instead of Wesley's undefined sexuality and non-gendered coded characterization.