Hi Clive,
In principle I agree with you. However (there's always a 'however' ), when you say
"If your micrometer measures a 0.750" block at 0.761" and you make the part to 0.761" on the micrometer it will be pretty darn close to 0.750". Who cares why the micrometer reads different."
the problem comes down to the drawings, which naturally have everything dimensioned with the correct value. Unless you are going to mark-up your own set of drawings with dimensions (values) that would be indicated by your micrometer, and verify (preferably before starting the project) that the error is constant over the range of values that you will need to measure, then life is going to be very tedious setting up blocks all the time to determine what measured values you actually need to work to.
It gets worse if the build depends on a stack-up of components. And even worse again if you happen to have another (dodgy, or accurate) micrometer that you may happen to use alternately during the day. And even worse again if you need to use two different types of dodgy instruments (your bore and cylinder example).
All of which is just the tip of the iceberg. But I'm sure you are perfectly aware of that. 
A good read is the NPL 'Good Practice Guide No 80 (Fundamental Good Practice in Dimensional Metrology). Good Practice Guide No. 80
Roger
Edited By Roger Head on 08/06/2016 02:40:01
Edited By Roger Head on 08/06/2016 02:47:24