Keep in mind: if you were looking for industry news, this was in the time of BBSes and FLGSes and -- if you somehow got internet access -- Usenet Newsgroups. And, of course gaming magazines like Dragon and White Dwarf and Shadis and so on. So, I didn't really get a huge reaffirmation on this phrase from anywhere beyond the SF Bay Area gamers (the birthplace of the game); I just assumed it was both (a) a given in the industry; and (b) probably a local view, not necessarily held beyond Northern California.
But having encountered the phrase on the HERO boards (of course, the choir preaching to the choir), and on some blogs, and more recently on podcasts I listen to like (Gamer's Tavern, and -- of course -- Play On Target), I began to wonder about what the phrase meant then -- and what it might mean now.
A Reaction Against Character Classes
D&D was (and, in a way, still is) the 1000 pound Gorilla in the RPG industry. And it handled character creation with character classes with a very rigid progression of abilities tied to levels. So, on one level, the phrase might have been a comment on the freedom from class/level-based progression.
And yet, there were skill-based and point-based game systems out there (Chaosium's Basic Roleplaying System and Steve Jackson Games's GURPS, for example), so it surely wasn't just that.
Building Character Is Its Own Reward
One of the great innovations of the Hero System ruleset, as spearheaded by Champions was the following concept: Game Effects Cost Points, Special Effects Are Free.
This freed players from looking for a super-exhaustive list of powers and allowed them to focus on the effect(s) of said powers: what do they do in game terms? And then they could move forward to model those powers with the champions power rules.
Now, a discussion on the many facets of this simple concept (like clever power builds, and rampant SFX abuse) warrants another post, but as to how it ties into the phrase: the many combinations of base powers, advantages, limitations, and power frameworks have allowed many character concepts to be realized (within a certain set of points) that in most other game systems of the time were unattainable without GM permission.
Some have even commented that this is, in a way, a mini-game within the overall game. And some of my old (non-Champions-playing) gaming buddies used to say that building a character was the most fun you'd have playing the game -- a disparaging statement that still hints at the inherent fun in this activity.
Also, there was a thrill in figuring out how complicated builds (like Firestorm's ability to combine from two separate beings) and complicated special effects (the ability of Nick Fury to call in a sniper shot from a nearby building on demand), even if you knew that, ultimately, the GM wouldn't allow it.
Player & GM Buy-In
In the early incarnations of Champions and the Hero System, the concept of Hostile GMs & Hostile Players meeting in the RPG arena was a reality and rules lawyering was a common practice. In, a hobby and a genre that is all about ensuring your abilities, having a way to guarantee that a power works exactly as a player defines it (and not as the GM might interpret it) was a delight -- especially with the argument: "hey, I built it this way and I paid my point and you accepted the build."
With Champions, you could build a power that would be legal within the rules, but would be up to the GM to approve or disapprove for their campaign. The difference here is subtle -- instead of can I have this? submitting a constructed power becomes will you allow this?
Naturally, this required a certain amount of system mastery on both ends. But the tinkerers tended to have this already anyway.
I Paid For It, It's Mine
Once the GM accepts, then the player's character gets the approval to the game effect paid for within the rules. Sometimes more, rarely less, depending on the GM's tastes.
What this means is that if the GM constantly vetoes your use of the power as defined, or nerfs it or changes it to your character's detriment, you're within your 'player's rights' to say: "well, why the heck did I pay points for this if you won't let me use it as built?"
If your power only has a special effect, for example, of being a power ring -- but you didn't take on the limitation of Focus (meaning that when it's taken away from you, you don't have your powers), then that power doesn't get taken away from you.
This kind of thing is big in a genre where players don't want to suddenly gain limitations or complications or disadvantages that they didn't accept discounts or extra points for.