I'd have to say the best writing in an RPG is usually GURPS in my experience. The sheer amount of research put into these books is astounding. I've so very often read that non-GURPS players use GURPS books as reference because of their quality of content.
My favorite fluff writing, however, has always been the excerpt stories you find in Twilight 2000 1st Edition. Especially in the core rulebooks. They were scattered throughout, interjecting in between the rules. Written as journal entries, they gave a wondrous and bleak illustration of the Twilight 2000 world. As awful as it must be, I wanted to actually be there when I read it in Junior High.
I've always thought these parts were written by the late Loren K. Wiseman, but I cannot seem to confirm that.