I regard the "Document Fee" in car buying the same way I regard the "Resort Fee" in hotels- as a mere artifice, a means to claim you're selling the product for one price when, in fact, it is being sold for more.
My question to the dealer is, "show me what I am getting for that added money." No added value, no pay. "They all do it" is not a persuasive argument.
I would prefer to deal with a very straightforward and respectful, "here's the price" dealer, than waste a boatload of time, back and forth-ing, manager-talking, yakkitey-yakking. Time is money.
Back in '89, shopping for a Jeep Cherokee, very hot at the time. Every dealer I found (this is, of course, pre-Internet) was advertising that they were selling with big discounts, but they had "Additional Dealer Markup" (or my favorite, "Dealer Protection Package") stickers, and started from an artificially-inflated number. One dealer even had an ADM sticker on an Eagle Premier, the Renault-with-a-sticker NO ONE wanted. One dealer I called (had seen list of Jeeps with their logo on the spare cover) told me (like all of them),"cone on by, we're dealing." I told him it was too far to drive to be jerked around, and he said, "fair enough, you got a fax, I'll send you dome stickers and what I'll do on price."
He did, the numbers worked, we dropped in and drove off either a new Jeep (the price was actually a little lower than he'd quoted, because of a new rebate program ChryCo started).
No chicken-dirt games, straight dealing. Sad thing is, I believe it when dealer principals with whom I speak tell me, "that can't work, because folks want to haggle, feel as if they've gotten a deal." Sure thing - I'm gonna go in and negotiate with a seasoned pro, school him. You betcha.