I agree with you that if the application is database orientated, then My Documents is irrelevant. The bulk of the application should live locally on the workstation with just the database on the server.
Agree with everything else but there are a load of Sherston apps that use the savepath for saving a shared database or data file that is not specific to a single user. In instances like that it shouldn't be a My Docs folder.
Otherwise, makes perfect sense and yes definitely agree that generic MSI's would be much appreciated.. perhaps with MST example files for common scenarios.