Interesting review. I can definitely see the appeal of having a plugin that does this for your own blog, but as you say, it kind of defeats the purpose if your domain is long to start with.

And to be honest, I think you hit the nail on the head here:

Tiny URLs to me are throwaways

The ONLY place I use bit.ly is for on Twitter. Anywhere else I have enough space to just use the link, and after a couple of days, no one is going to be seeing that tweet anyway, so who cares if the service stops being around.

For a plugin like this to take off, it needs to be one click in my mind. After initial setup, where all the available options are defined globally, a post is published, and in the message at the top of the screen saying it is published, the short url is provided for you.