A bug report has been filed and is currently being worked on. There are a few workarounds but it isn't a perfect fix. I was able to login using Wayland with this fix but I was not able to use logout.
https://bugs.launchpad.net/ubuntu/+source/lightdm/+bug/1632772
One solution is to remove Unity 8 desktop:
sudo apt remove unity8-desktop-session
sudo apt autoremove
Quoting Wayland FAQ
No, that is outside the scope of Wayland. To support remote rendering you need to define a rendering API, which is something I've been very careful to avoid doing. The reason Wayland is so simple and feasible at all is that I'm sidestepping this big task and pushing it to the clients. It's an interesting challenge, a very big task and it's hard to get right, but essentially orthogonal to what Wayland tries to achieve.
This doesn't mean that remote rendering won't be possible with Wayland, it just means that you will have to put a remote rendering server on top of Wayland. One such server could be the X.org server, but other options include an RDP server, a VNC server or somebody could even invent their own new remote rendering model. Which is a feature when you think about it; layering X.org on top of Wayland has very little overhead, but the other types of remote rendering servers no longer requires X.org, and experimenting with new protocols is easier.
It is also possible to put a remoting protocol into a wayland compositor, either a standalone remoting compositor or as a part of a full desktop compositor. This will let us forward native Wayland applications. The standalone compositor could let you log into a server and run an application back on your desktop. Building the forwarding into the desktop compositor could let you export or share a window on the fly with a remote wayland compositor, for example, a friend's desktop.
TL;DR is that it "out of scope". Over the years there collected lots of apps and protocols for exactly that kind of job, and there's very little sense in adding this protocol to Wayland.
Worth mentioning that AFAIK nobody have worked on the mentioned hypotetic usage of X.org protocol on top of a Wayland compositor.
I am asking for a report from Ubuntu 17.10 users about "X11 forwarding".
I guess you're talking about a bugreport. You won't find one (well, at least not an opened), because it would be closed as NOTABUG.
I find many predictions of disaster
What's so bad in this? It's not like you lost a functional, there's lots of protocols for that kind of job. Besides, although I don't use X11-forwarding myself, but from what I've read it doesn't work well nowadays for many apps. I vaguely remember, it's because many apps (mainly games and those that heavy on graphics) are using direct rendering and bypass XServer.
You can just stick to X11, I don't see it as a problem. Wayland is still in-development, and X11 won't go anywhere for a very long time. In fact ATM, out of many DEs, Gnome is the single one have Wayland nicely working. You might find it funny, but not even Weston — existing for the sole purpose of being the reference implementation — have it working fully, because it doesn't support the primary selection protocol.
Some development continues in XServer-land too. E.g. just yesterday I have cursory seen some discussion about HDR implementation on #dri-devel channel of Freenode. So it is definitely not anywhere close to get obsoleted.
Best Answer
Since 5.4 it is possible to start a complete Plasma session on Wayland. For this go to a tty, log in, end the running X server (otherwise startup might block) and run the following command:
Support for running a full Plasma session on Wayland is still in it's early stages. Bugs are to be expected and there are known missing features. Please consider it only as a mode to experiment with.
Source KDE Community
On Kubuntu you might need to Install
plasma-workspace-wayland