It really depends on how you define what a game is. It sounds to me like your referring to competition as a game. Having strict rules for competition makes sense but you don't have to have a competition for something to be a game. So rules, good or bad are not a necessity for a creative game to take place. IE: The act of participating in a game involving or where the focus is role playing.
It really is more about the mindset of the players then it is the game itself. You are correct, which is why systems/rules are not really needed (they are optional.) You don't have to have that mindset to play an RPG (tabletop or otherwise.)
Precisely. It may be a big tautological to refer to a game as needing rules because rules make it a game, or something, but I do make a distinction between an RPG and a non-game RP, primarily the inclusion of an element of competition whether it's player against player or players against enviroment/GM. Even if it's just a 'competition' against luck or random chance.
I'm not a competitive person and I value creativity over competition. As a result of that, rules have only as much meaning to me as I want them to.
I can Freeform then turn around and play with hard rules in the same game/same setting without it making a difference. My friends and I often used to do this when we'd take long road trips. We'd skip the dice, skip the rules and just freeform our role playing until we decided to pick the dice back up. If at all.
Now I'm not saying that you can completely do away with rules.. I'm just saying that the kinda rules that are involved in a "system" are not necessary.
The way for this to work, simply involves trusting your storyteller/GM's judgement and for the players to respect each other.
If you have rules, you've made a system. It might be a rules-light system, and/or a diceless system, but if there is any means of arbitration other than 'talk it out and don't be a meanyhead', you're not longer playing 100% freeform.
I looked through the group games in several of the different categories here. Most of them look freeform to me. I see, magic, super heroes, fantasy settings, and lots of others that are all freeform/non-system.
So your wrong on that entirely.
Not to mention that fact that the system games themselves tend to not use the actual systems very much at all anyways. So it seems the ability of a system to function or not, if it's broken or not, doesn't matter much because people here at least don't really abide by them anyhow.
I'm not wrong, you misunderstood me. Of the total freeform games on E, the number of freeform games that are 1v1 is a much larger percentage of that total than the ones that are group games. Similarly, of the total system games on E, a vast majority of them are group games, compared to a tiny minority of 1v1 system games.
As for using a broken system...a game that doesn't use the system isn't a system game, whether or not it claims to be using the system. So that doesn't really make sense as a counter-example.
I think good mechanics are nice to have but bad or good, a good GM/Storyteller should have no problem working with them.
I've been told by a number of people here on the forums how horrible the Palladium system is, yet I never had a problem with it in all my years of play. I never had a complaint from any of my players. No one ever complained about the system.. or any system that we ever played it. We laughed occasionally at some odd discrepancies in various systems but good or bad, the systems never made much of a difference to us as players or GM's(story tellers.)
So the only thing I really agree with is, "prioritize good roleplaying over mechanics."
Your Palladium experiences aside - which may be atypical, since you've said yourself you don't hold very strongly to systems even when you use them, it doesn't really seem arguable that a bad system will make for a worse game using that system, since having the system in the first place assume you'll use it. Different systems are better or worse at different things, different groups prefer different systems (and extensive experience with a system can go a long way towards working out its kinks) - 'good' and 'bad' can be very subjective.
For example, I'd never try to run a gritty survival-horror game under the D&D ruleset, because its high-fantasy design means characters range from mere superhuman to demigods in strength, which severely undermines the themes and mood of survival-horror. If I wanted to run such a game, I would use a 'good' system such as Call of Cthulhu or All Flesh Must Be Eaten first, but if that was not possible, I'd run it freeform, because resorting to a 'bad' system like D&D would result in me and the group either fighting the rules to tell the intended story, or ignoring them (at which point why not go freeform in the first place).
In direct reciprocal, if I wanted an epic legend adventure full of magic, monsters, and impossibly badass heroes/heroines who can wade through armies of lesser foes, I'd use D&D, or FATE. I wouldn't try to shoehorn in such a game to the World of Darkness (old or new), because the rules would detract from my/our story instead of supplement them.
In both games, yes, it could be run freeform, and for people who prefer freeform to begin with that would be the 'best' option'. But if you're aiming to use a system in the first place, pick the best one you can.
Addendum: This is horribly off-topic. I'm willing to continue, but we should do it somewhere else.