I've done both and found prepaid to be beneficial. I like to prepay the excursions and gratuities, buy drink tickets for alcoholic drinks (since we don't drink much it is easily taken care of before hand), buy photo coupons for a few photos, etc. The more that is paid during the months leading up to the cruise the better - IMO!
As far as opening up things for lousy service, I always just figured that the cabin stewards and waiters are not informed of which guests have prepaid and which haven't - on sailing after sailing that is a lot of unnecessary communication. Besides, they know that we guests can go get tip monies removed if the service is not up to par. Again, just my opinion.
Life's a Beach ... enjoy it on a Cruise!
Carnival Ecstasy 4-06, Carnival Conquest 9-07
Mariner OTS 9-08, Carnival Conquest 2-09
Carnival Conquest 9-09, Carnival Fantasy 1-10
Carnival Triumph 5-11, Mariner OTS 11-11