I'm actually behind that, conceptually. *shrug*, Maybe anyone who's stunned or otherwise incapacitated/occupied (basically, someone who couldn't easily go "Oh, I see... Mr. Wizard guy's gonna be hurling a fireball" for whatever reason) doesn't get the bonus. That way, it's still abstract, but at least it's not just a magical blanket of constant friendly-fire mitigation. I dunno, that at least makes a lot more sense than "you just somehow will your exploding fireball to not-harm people standing in its midst, just because."
It's magic... just like the exploding fireball
Really though, I get the criticisms and even though I like the idea of a safe or safer area around the fringe of the explosion (provided you pump your stats in that area) where the wizard/mage/dance machine can somewhat control/mitigate the effects. I do think a having the entire bonus area, depending on the size, friendly fire free would be too powerful
Also, I think people are trying too hard to make sense of nonsensical things (read magic)