The place I work doesn't add a service charge, but I have worked somewhere that did, from the other side I didn't like it, it made me feel awkward and people got stroppy with me when asking for it to be taken off because I think their own awkwardness, but I wasn't allowed to do it myself - I had to get a manager because they knew staff like me would remove it before it got anywhere near the customer.
Of course they made out like they were doing us a massive favour, and guilt tripped you if your table didn't tip, because in their view, the only reason a table would ask for it removed would be because you'd done something wrong and therefore were letting your colleagues down because they weren't going to get as many tips.
And then of course you'd get the customers who lay into you about it, all in all it's shit from both sides, why should my income rely on the belief or whim of someone else? I've known tables men leave a large tip to later find out they've groped the 16 year old waitress and she didn't say anything, when they do say something and the table is asked to leave because of it they certainly don't leave a tip, usually create a scene!
However I really don't think that upping wages and prices would go any better, people have said on this thread how expensive it is to eat out, but how businesses should pay their staff proper wages and put the prices up - that's a bit contradictory to me, it's already too expensive that people aren't going, but I don't like tipping as a concept so you need to put the prices up.
At least with an optional service charge you can have it removed, imagine paying that extra 12%(for example) in with the menu price and getting really shit service but with no option but to pay it because it's now not optional.
I just really wish people would keep their assumptions to themselves, it's horrible being accused of standing there having your hand out of only doing a good job because you want a tip. I don't agree with the service charge but if where I work applies one I've got no option to change it, moaning at me won't do anything - except of course release your frustration onto me.