I think the main thing to take into consideration when looking at For Fun is that, yes, winning in it is still creditable, but there is a minor luck factor involved, and more openings for cheaper KOs. However, I won't say that winning in For Fun in exactly difficult or a cakewalk. You've got to be aware of the items that are available, who is getting the most kills, etc... But I feel the biggest problem is that there's just no 1v1. Free For Alls aren't really a problem for me, but when you're thrust into it with randoms, the problem becomes apparent - when there's a widely varied skill-range between the players to a point where one person curbstomps game after game regardless of luck, everyone plays certain characters with huge advantages (*cough* Bowser.), or people start teaming up on a particular player or giving others points on purpose, etc.
I think the thing you really have to look at is that - for fun is exactly what it says on the tin - For Fun, so winning in For Fun for me isn't much of an achievement based on that alone, since everyone there likely isn't taking the game as seriously as they do in FG, but winning in FG isn't really a big deal either most of the time.
-and when it comes to taunt parties in For Fun, I tend to leave... Sure, some people find that fun, but I'm a big fighting game fan, so I really do genuinely enjoy fighting, taunt parties just irritate me as it's basically as good as just not playing the game at all IMO.
When it comes to hectic VS controlled though, I find that it's difficult to even switch off the part of my brain that enjoys a more controlled environment, so sometimes the chaos of For Fun is genuinely not as interesting to me. However, the more varied stages and wider range of weaponry available definitely gives me more to tactically think about, and I do enjoy that aspect. For Fun might not be as consistent, but there's more to think about if you really wanna win, and I think that's pretty cool (Some items are pretty BS though, not gonna lie... The whole "Rush for the OP thing to win." is something I've complained about in other games, not just Smash, so...).
As for the whole debate on the consistency of results, I do feel it's an issue, but on the other hand, I don't particularly care about my win % in general, especially in a mode labelled "For Fun". -and there's so many ways you could lose in For Fun that it's difficult to care anyway, whereas winning still kinda feels like something to be proud of. Sure, not as much as in FG, but still, you likely had to put in some skill for that win, regardless of mode. At the end of the day, I'm playing a game - I want to have fun with it (even in FG) - so my win-rate doesn't matter. However, if you really care about being the best at Smash, the lack of consistency and more ways to "unfairly" lose in For Fun will definitely mean that that mode is not for you... -which in of itself is slightly unironic, let's be honest.
[Edit]: Oh, and for the record, I don't mind items at all outside of the occasional 1/2 that I think are just downright excessive or destructive. I believe some items like the Beam Sword, Bumper and Freezies - that have very little impact if players aren't aware how to put them best to use - should even be considered for serious play, since even if you go running for that Beam Sword, for example, chances are it's not gonna bag you an instant win. So items being on is actually one of few, if not only, encouraging factors for me to play For Fun.