This doesn't surprise me at all. I've been updating plugins, themes and core constantly for years and never seen a single one go down because of it ... with the exception of extremely poorly setup sites.

The only problems I've experienced, were non-critical functionality just disappearing and I've broken a few themes due to using brand new stuff in WordPress trunk which hadn't gone stable yet. The last problem is just what you'd expect if you are living on the edge like that, so not something I'd hold against the concept of upgrading regularly.

Personally, I have all of my plugins set to auto-upgrade whenever a new update arrives in. My biggest fear is a goof up by a plugin developer messing up an SVN commit rather than an actual compatibility problem.