Jeff,
You're absolutely right. I've heard the argument that "users" don't read them. As a developer, I almost always do, especially on ones that have a reputation that merits caution. I guess that means that we developers and site admins just don't matter. [sniff!]

I think that along with the basic problem, that writing documentation is boring and we hate to do it, there are other possible factors. Taking Woo as an example, I wonder if they keep it very bland so that people who read it won't freak out, and bury their tech support, or worse, badmouth the plugin to others. Spin doctoring, as it were. "Mistakes were made...." ;)