As you said, some guitars sort of need a finish or the sound can be too hard. While that might be true, it seems to me the more logical thing to do is choose a grade lower in hardness of wood. That way you maintain the sound you want without needing the finish to mute it.
While on one hand the muting does work for the guitars that need it, it becomes a bit harsher on ear and much harder to integrate into a band while retaining the essence of authority as towards presence. (especially given the sorry ass state of live venues these days with their shouting speakers)
It is pretty challenging to explain to someone that something sounds better than something else, but the qualities of the type of sound are not desired. It is a new concept to most people. Better should be more subjective but as humans we actually maintain an exquisitely high ability to detect fatigue levels; we just generally don't consciously know it. It is much more universal than people want it to be. Their words don't reflect it, but their listening habits and, particularly, repeat listening habits show this very well. It can often be the difference between watching a band or going for a smoke. The great modifier is of course alcohol, however.
For the same reason I haven't been able to entirely understand the true benefit of power conditioning towards live music. I'm excited to try my future Tode on different levels of power conditioning. Live bands so far have been very in favor - primarily limited by their ability - to some power conditioning. Frankly it is hard to understand how it hasn't been more of an issue given the amount of small adapters used for the hordes of pedals any band typically operates with now. All those tiny transformers from AC adapter are just common mode makers. Rectifier noiiiizzzzeee in all your gear. I tell every pedal dork I know that we should make them a battery pack that fits in the suitcase thing they use, and probably hold enough of a charge to nearly finish a tour with. They all know battery sounds better but dies quick with 9v's. I've been dreaming up a better tone device lately... Along with still wanting to know what a split signal distortion pedal would sound like (described it to you in a PM). Perhaps my tone device could have outputs for distortion pedals (two outs)....
