I'm always surprised when I find out how much trouble people have with the military interface- I've found that the basic premises behind it were rather intuitive, and a little dedicated work irons out most of the quirks with the system. I've always had more trouble with farming and maintaining the clothing industry- I can never quite balance it right.
There are some fundamental issues:
1) Schedulle switches do not provide feedback. It takes some time for dwarves to snap out of their previous orders. It makes everything seem like it just does not work at all. I completelly expect squad that was just assigned to patroll duty to actually start patroling instead of chilling out for month or so.
2) Enter key deletes. Seriously, how come, that is like ... worst key posible for that task. This is especially annoying when you accidentally delete chest item from default Metal Armor as there is not way to re-add that one other than reseting uniform... and if you manage to delete that from uniform, well it is ctrl-alt-del time and continuing from latest backup.
3) Squad assigments forces you to pick for all the dwarves, including other squads. Cue massive confusion and accidentally canibalized older squads. Even worse, when you add dwarf, list scroll position resets and if you want to add another dwarf that was right next to him (typical for new immigrants), you have to scroll again. It is also painfully useless if you decide to draft everyone as emergency response - try doing that to 150 pop fort without going insane.
It's a case of different play styles finding some issues to be irrelevant while others are glaringly huge. Issue #1 is a non-factor for me as I prefer to micromanage from the squads-screen instead of setting up patrol routes or defend burrows. Issue #2 is even less relevant because I prefer making all my equipment myself and I want a guarantee my soldiers equip specific armour types of specific materials which I know I've made. Issue #3 can be solved using Dwarf Therapist - give everyone temporary custom professions or nicknames like "S1", "S2" and remove them after setting up the squads. While the list position defaulting every time you select a dwarf is a nuisance, in the case of migrants I can just scroll backwards to get them as they're coming in from the map.
Well, that's this player's way of playing that doesn't get grossly bothered by these and other Issues with the game. Toady's task is to try and accommodate everyone's playstyles. The dev cycle currently does not have a "provide feedback for improvements, not just bugfixes". Toady moves on when he deems a set of features to be playable to certain styles, not every style.
Issue 1 doesn't seem to bother me so much, perhaps because I already feel like I wait a good deal of time for dwarves to go do their jobs. If I have some mining designated and I make a random dwarf a miner, I hardly ever see him go straight there as soon as I tell him to. Then again, the infrequent occasions I use patrol routes I haven't noticed the kind of month-long delays you seem to be experiencing.
Issue 2 is again par for the course for me, and I regularly change some key bindings because I don't like the defaults. That said, enter to add/remove was pretty intuitive for me, once I grasped the general flow of the screen- add things from the list at the far right, remove things from the left. I've never noticed the lack of "metal chest" largely because I always delete it in favor of a more specific "metal mail shirt" and "metal breastplate" assignment, to make sure my dwarves layer properly.
Issue 3 is actually not an issue- when you scroll over a dwarf when choosing where to assign him it lists his squad affiliation, if any, in the upper right. I've always found it quite useful when I need to consolidate 3 squads into one because my military was decimated by a goblin siege. When immigrants arrive, they are always at the bottom of the list in the order they arrived- since I typically evaluate migrants for military suitability as soon as they arrive, I don't typically have troubles filling in my squads. I'll grant you it can be tricky looking for replacements later since there is no way (outside of Dwarf The Rapist) to organize dwarves by a particular skill (as opposed to profession,) but that problem is not unique to the military screen. As far as drafting your entire fortress goes, yeah, that's a pain in the butt, but if you're at that point its because other mistakes have been made previously- DF is a game about preparation and planning, not reaction.
Like Psieye said, how big an issue is depends on your playstyle and experience, and is different for everyone. If there was a big problem with, say, mechanics, I'd never know about it because I never do anything more advanced than a pump stack.