I agree, it is often not the best approach. But many situations demand a well defined approach to estimation and although the OP tried to preempt this, he didnt provide an alternative
There's also something of an uncertainty principle here -- more precision of estimation is possible, at the expense of increased expected timescales (partly due to padding, partly due to picking lower-risk approaches).
I personally think estimating projects is one of the most difficult things about this industry. Especially if we're talking about delivering many calendar-months worth of effort for a team , unless its just a variant on some other project[s] the team is well experienced at