The worst are the 'RPG's' that don't even let you choose how to develop your characters, that have characters with completely preset skill and level progression in addition to a completely linear storyline. Those aren't RPG's at all for me, more like 'storybook' games.
i dunno, letting players have complete control over their character's development does have its downsides. take FF12 for example: because all characters can be developed to be exactly the same as each other, they lose interest and a sense of uniqueness to the point where only their stats and appearance differentiates themselves from each other.
sometimes having a predetermined character can aid in having more tactical battles, preventing players from choosing the easy way out by utilizing what they have. there is, of course, a downside to this as well, since you're given no real options in choosing your battle style and may be forced into utilizing specific characters (whom you may not like) for certain situations.
it's all really based on the kind of game you wanna make. but i must say, options are always good to have. too many, though, can make the game more cumbersome, what with balancing issues and what not.
might i suggest a hybrid of the two? giving your characters options (exclusive to them or available to everyone) while still letting them retain those specific qualities that make that character who they are...and no, i'm not just talking about their limit breaks and looks.