More food for thought on this topic: I just defeated Klaus in my current cleric run. It was surprisingly easy, but it had little or nothing to do with my having disabled auto-fail.
I examined the transcript of my battle with Klaus very carefully. I was using a level 14 cleric with Animal (cat's grace one of many strategies to achieve my AC 38, and an air elemental cast as the level 8 version rather than the level 7 version) and Good (stoneskins on myself, Red Tiger, and air elemental) domains, (roleplayed as a cleric of Chauntea, just so that domain combo would be legal).
My henchman, as mentioned, was Red Tiger.
I had Red Tiger and myself buffed to the nines, of course, as all clerics do, and the shorter duration ones, such as Spell Resistance, Freedom, and True Sight, were cast using the Extend Spell feat.
One of the insights that I got from studying the transcript of the battle was that there seems to be kind of an arms race between dungeon masters and "clericzillas". I thought that the DC's of Klauth's spells and breath weapon were far too low for an ancient dragon.
He was scripted to do nothing much but use his breath weapon interspersed with spells. I had used the "dead dragon sphere" to start the battle with Klauth at "badly wounded", but I'm not sure that really made much difference in the outcome. I think he would have been far more dangerous if he'd been using his claw/claw/bite physical attacks instead of relying upon his spells and breath. That would have really put my AC 38 and healing potions and spells to the test.
During this battle, he cast his breath weapon (interpreted as "Fire Storm") repeatedly. Once I resisted it completely through the Spell Resistance spell. The other times, he quickly battered down my Elemental Resistance, but I still had my Ring of Helm ("elemental resistance") taking 15 of the damage every time. All of my saves are "through the roof" by way of a Ring of Resistance +3 and a Cloak of Fortification +3. The reflex saves against his breath were the lowest, such that I would have lost the save on rolls of 1-5 regardless of autofail on or off, but I was still making most of them.
I stopped swinging to cast a Heal on my air elemental once, healing 100 damage. The air elemental was taking the most damage. Red Tiger was taking a beating, but was holding up without needing me to heal him.
Near his end, Klauth cast two Power Word: Kills, presumably at me. I don't know if disabling autofail had anything to do with why I was still standing, but I doubt it. I had Death Ward active. The transcript didn't show that I had to make a save at all. I did take some negligible damage from those last two desperate spells before Klaus fell.
My point with all of this is twofold: First, Klauth's DC's for his magical attacks were far, far lower than they should have been. All of the save DC's were 15 or lower. I should think that an ancient dragon ought to have spell DC's of at least 35 or higher.
Second, Klauth's scripting was terrible. I probably ought to replay the OC with Tony K's AI at some point to see if he makes these super-boss encounters into what they ought to be.
Conclusion: Having autofail on is a very cheap and unrealistic way to create difficulty, and perhaps is a case of "DM cheese". If you want your computerized monster to be scary, give it a decent AI, and give it the save DC's that it deserves. Don't "cheat" against your players by exploiting the "automatically fail saves on a roll of one" rule. (And don't thereby encourage your players to "cheat" by exploiting the rule on their side.)