FATEs have several issues. They are very similar to dynamic events from guild wars 2. Right down to the culling issue. In GW2 everyone was DPS though, and you didn't need to necessarily target anything so having visual on mobs was not important. In ARR you do need to target most things and in addition casters often get screwed because in the time it takes to cast a spell the mob is already done from the 100 other people doing it. FATEs are also the only reliable way to get a good amount of seals. Only other one is leve's but you have a limited amount of them.

As many have pointed out as well because of how many people are at them and how easy they are you do not learn to play your class at all and things get a lot more unforgiving as you level up. The average player going from FATEs to dungeons and hardmodes is going to fail hard. Some people will know what they are doing but they are the exception.