YES. Yes it is.
It's an art that literally goes back hundreds and hundreds of years if not thousands. (Noted authors were part of a Sherlock Holmes writing group, etc.)
It is just as valid as 'real' fiction. For the majority of us, we put ALOT of effort into what we write. As someone who's written over 240 fics, I can definitely say I've put alot of effort in (I've written a few series--I have alot of fandoms I like--and many one shots and the like which can get lengthy.)
It's another way to see things, try things. Although when reading fic you know most of the characters involved, you are building a world from the ground up. And as someone who values characterisation most, you have to work extra hard to keep them IC.
For me fic also gets me inspired to work on my own stories. I'm currently working on my first book. I haven't forgotten fandom though, been in it too long and I have so many of them.