There probably isn't much I can add to everyone else's lengthy and incredibly deep responses. But I can add my own views and experiences.
Your 'friend' sounds like they really don't understand you at all. Yeah, maybe MCR don't want to read it themselves. Like other people have said, I myself wouldn't want to read stuff written about me. But fanfiction isn't really for the people it's about. Sometimes, yes, granted, emotional pieces aren't so bad. But slash, and that kind of thing? It's for the fans.
I'm a teenage girl. Nope, haven't had an awful life. Yeah, battled some demons, depression and the usual adolescent things. But I'll admit, I'm pretty much a kid. I won't write the best stuff, or the most original stories, or the most moving pieces. My main story is just an idea that a few friends and I were messing around with, and I was left to write it. Then I started emailing it to them, and then figured that I should post it somewhere. Yep, it's kinda cliched. Probably pretty transparent, too. Not the best stuff I'll ever write.
Don't get me wrong. I love writing any kind of short story, and yes, I take it seriously. But why do I write fanfiction? To exercise my imagination, to let some ideas loose, and try different styles. My parents, and a lot of friends, don't know about fanfiction that I've written. All they can see is my writing changing gradually in the things they do read.
There's also the element that fanfiction is great, character-wise. You can base your fanfic characters on what you know of somebody; their experiences, their past, their attitudes. Or you can just start from scratch, using them however you like. It's easier for images, too, if you know what the people in your story look like. That's part of the reason I've written fanfiction before getting involved in more serious writing challenges. It gave me a bit more of a place to start without, instead of starting an entire story from the base up.
It's not just writing about celebrities or well known people that was being insulted by your friend, either. Anyone who writes knows that, to make a convincingly realistic character, you should try and base them on real people. The short story that I've written that I'm most proud of wasn't fanfiction, really, but it was based on the relationship between two people I know. It was a dedication, a present to one of them. And I know they really liked it. Just because I wrote it as I admired them, does that mean I'm not really their friend? I think not. Same thing with fanfics.
MCR's music really helped me through some of my darker phases. I'm not too religious. But whatever justice, whatever supreme force there is, it's defnitely being chanelled through their lyrics and melody. Is it so wrong that we want to give this back, and show it?
It's kind of late her right now and I really should be getting some sleep. There's probably a lot of typos in this, too. But I just had to comment before I left [=