I think characterisation and dosage are both equally important.
Characterisation because, for me at least, fanfic is about the characters I love, and that's especially true in genres that are all about the relationship between characters. And h/c, like shipping, is about relationship. If the characters are OOC, then I might as well be reading an original story and the emotional connection is lost.

And dosage, yes, and balance between hurt and comfort. I think we can all agree on those points.

About the "h/c = badfic" thing: I think it's because h/c is some sort of "emotional kink", if that makes sense. It's about fantasies, as you said. Not everyone is going to like it, some people are going to be squicked by it and some people will swear nothing good can come of it, ever.
The same thing could be said of, for example, mpreg -I personally go out of my way to avoid mpreg, but it doesn't mean all mpreg fics are bad. It's just that, no matter how good the writer is, I will feel uncomfortable because... it's just not my thing.
And that's why, imho, such genres don't need excuses to be written.