(Good) Encryption is a (secure) mechanism for obscuring data, surely?
In comparison, which particular password I use can be very highly decoupled from the rest of the world and my architecture, which makes it vastly more (reliably) obscure.
Somewhere inbetween "you have to know my server exists to send 'login:admin password:pass' to it" and "the volume's encrypted with a 2048-bit cypher generated from atmospheric entropy" is, maybe, a useful middle ground.
Hidden volumes seem like more of a defensive meta-obscurity, in that they obscure your metadata (your ownership of a particular piece of encrypted data).
Also, there are plenty of historical ciphers that fall foul of Kerckhoff, I don't think we can say retrospectively that they weren't done for security, and in many cases were probably totally adequate for some time, if not their lifespan.