You might wonder why you are getting this error "The current configuration system does not support user-scoped settings". You need to check your project properties, under settings, you will find Settings.setting page/file where you can find the scope column. You need to check if its set to Application or User and change it accordingly.
Problem can be in other way that the Web Service reference had its "URL Behavior" property set to "Dynamic" instead of "Static". After setting it to Static the problem may went away. So you can try it also.