EDIT: To make this a more general topic: what do people actually think of this? I always found RP that refused anything not explicitly stated in PF kind of stale, given PF's currently relatively narrow scope
It depends a lot.
Making up something that applies to some small group somewhere is awesome and useful.
Making up something that applies to galatic events or should have a major impact is pretty annoying to me.
For example, we recommend new Minmatar RPers to make up stuff about their
clan - customs, rituals, festivities, quirks, etc. - but
never about their tribe. "My clan has this custom that we ..." is great. "There is this Sebiestor custom that ..." is not.
I was once asked on a public channel whether Arkady knows some "Sebiestor customs regarding XYZ". I went OOC and told that there is no PF on Sebiestor customs, and I surely will not invent some - but if there are some, Arkady would know them most likely. I can't simply invent them, because that would force every other Sebiestor to either accept my idea of "Sebiestor custom" or simply contradicting Arkady, saying that Arkady has no idea about "Sebiestor custom". Inventing something about a clan would have been perfectly fine.
I wouldn't talk about "Gallente fashion" as a whole, but it's perfectly cool to talk about that fashion show back on your home planet. (Well, fashion is inconsequential enough not to matter either way, but for the sake of argument here...)
I think the dispute between the two of you is mostly about the scale of news. There are some differences and discussions (e.g. what proportion of slaves was *really* released in the emancipation act, to mention a recent topic) that players can not simply make up. CCP has to put out the PF for that. On the other hand, minor stuff should be made up by players. That's what we're here for after all. (Preferably also news that actually happen in space, not just on IGS...)
There's also some weird RP thing going on that I have not yet understood, about players simply making up scientific research or evidence, presenting it as such, and then hoping CCP accepts it (Sansha/w-space related stuff). Seems to be "normal" to some, but the concept is totally alien to me. I haven't really understood it, either, so I can't even describe what I mean that well :-|