I have no problem with Heel vs Heel feuds, but they have to be done right, and they have to have some meaning. Let me elaborate.
In 1992, the SummerSlam pay per view was best known for Hart vs Bulldog and Savage vs Warrior 2. What many people forget was the entertaining and interesting feud between Shawn Michaels and Rick Martel.
On a Saturday afternoon show, Rick Martel was challenging Bret Hart for the coveted Intercontinental Title. Shawn Michaels was also feuding with Bret (this was around the time the ladder match was first run for the IC title), and casually and arrogantly sauntered to the ring and started punching Bret in the head. The issue? Bret was locked in Martel's finisher, the Boston Crab! The ref DQ'd Martel for Shawn's interference, but thought he'd won the title. When Martel looked over and say Shawn beating on Bret, he realized he'd lost the match and the shot he had at the title. He was furious.
A week later, Shawn was wrestling while valet Sherri was ringside. Martel then sauntered down, and rather than interfere with Shawn's match, he flirted with Sherri. He winked at her, she winked at him. Shawn got distracted by this and nearly lost to a jobber. Martel left, satsfied with himself.
A match was signed by Tunney that the two would face off at SummerSlam, but Sherri made them both agree to a stipulation - no punches in the face, no kicks to the face, etc. She didn't want either man's "wonderful features" messed up. So began a funny heel vs heel feud with the face punch teased like 3 times. The two put on a mat wrestling clinic, with near falls, and near punches. Shawn finally had enough, and socked Martel. Martel hit back. The slugfest began, and Sherri fanted. They both tried to take her to the back, and attacked each other in the process. The match ended in a non-contest.
There was a reason both men didn't like each other. They both wanted to be the #1 contender to what would later that night become Bulldog's IC Title (Shawn won it a couple months later at Saturday Night's Main Event) and both men wanted to be the "sexy guy" of the WWF and earn the affection of Sherri. The no punch to the face stipulation, though silly, was well executed and extremely entertaining. Sherri sold it all like a pro. God I miss her.