See... when I shoot an arrow into the ground, or into a party member, I just tell myself I rolled a critical fail and go on... As for the collateral damage friendly fire, it can be very useful at times. If you have a character that can take the damage and has that necklace of elemental whatever then the fire you just hit them with will let them hit their targets with added fire. Or... just last night... I had a problem where the gobbos at the gate were not killing Wyll. So, I had to do it. Since I didn't want to just focus all my efforts on killing him, I primarily selected AoE spells and items to allow me to kill him and the nearby goblins. If they turned off FF, then I fear I would be unable to kill any of the built in NPCs because they'd be force-put into my party whether I wanted them or not.