You may have heard the virtues of "Yes, and" extolled. If not at DMing school, then perhaps at improv comedy school.
The thinking goes like this: Saying "no" to a player discourages them and makes them sad and makes them not be having as much fun. (Saying "no" to an improv comedian not only makes them sad, it also disrupts the pace of the banter and throws everyone off their game and makes the act less funny, so the parallels are only surface-deep.)
Consider the following:
"Yes, and" > "Yes" > "Yes, but" > "No, but" > "No"
Always aspire to be as far left on this list as you possibly can. Whenever you make a decree, ask yourself "is there a good reason I'm here, and not one to the left?" Going one to the left if you can will make it more fun for your player and more fun for you. (A possible exception is players who ask for all sorts of stupid things for no other reason than because they suspect you'll let them get away with it. I'm honestly not sure how to deal with this kind of player. It may be that this is the only situation in which an unadorned "no" can actually be justified.)
Certainly, there are good reasons to find yourself somewhere on the right. Some things are just broken. Leadership, for example. This core principle is why I go with the "yes, but" of nerfing it, rather than the "no" of banning it outright. Similarly, rather than banning Divine Metamagic ("no"), only ban nightstick abuse ("yes, but").
Rather than disallow all flaws, allow them and make an effort to exploit them to the fullest possible extent -- if people take Shaky, throw lots of ranged and flying enemies at them; if they take Murky-Eyed, throw them against lots of enemies with concealment (This works out to either a "yes, but" or a "yes, and", depending on the adventurousness of the player).
You want to buy 50 flasks of lamp oil? Yes, but several sessions later you may find a factotum casting a scorching ray at them.
But it's still always more fun for everyone to go as far to the left as possible. You want your character to be a prince? Yes, and also take this plot I've hung on that hook for you.
You want to buy dragonhide armor? Yes, and what colour is it in case you come across somebody who doesn't take kindly to you wearing a relative? (Is "Yes, if you provide the dragon skin" a "Yes, and", a "Yes, but", or a "No, but"? Probably depends on how plausible the party killing a dragon is at their level.)
See how much more fun that is for you, the player, and the party than just "yes"?
As of this writing, I just told a player "no, but". I'm sadly in the bad habit of saying "no, but" much more often than I ought, though I've mostly broken myself of the habit of outright "no"s. The question was "Can I use this homebrewed flaw?" and my answer was "No, but you may refluff a WotC-published flaw to achieve a similar effect." (Homebrewed flaws tend to be terrible, or as I heard them described once, "pants on head retarded", so I am more prejudiced against them than I am against other homebrew, even if an individual flaw seems non-terrible on the surface. Not that I'm not prejudiced against homebrew in general. But this is prejudice, which is why my wording was "I'd rather you didn't, though I may allow it if it's a deal-breaker" rather than a flat "no". An empty justification, perhaps.)
The other day, I got to say "yes, and", and it made me feel good. A player asked if he could use Central Casting: Heroes of Legend (which seems awesome, by the way). I said (provisionally) sure, and when he rolled up a character, I got to say "Oh, hey, 'human nomads' probably means a nation of sailors who didn't bothered to recolonize the land when the Subsidence came, and 'light cavalry' means riders of sharks or dolphins or porpoises, and 'skiing' means 'water skiing'." It made me feel like I was World Head again.