If the people doing the bantering are both really smart and really quick, and it doesn't descend too far below the belt, it can be entertaining, but as a spectator sport. Like watching boxing, maybe. Not something I'd want to participate in, but I do like to watch.
When I'm forced to engage, though, I often don't manage any better than "Fuck you" either. Against the right foil, that's funny, too, but when I say it I'm generally just exasperated rather than going for the laugh.