http://www.amazon.com/Software-Estimation-Demystifying-Pract...
Every time I estimate for clients I always talk about the Cone of Uncertainty.
Of course accurate estimates have tremendous business value. But in reality they often come at the expense of what the client really needs which is delivery of features. I have seen estimation and tight project control taking up substantially more time than delivering actual features. And it was exactly as the OP stated:
> Software projects that require tight cost control are the ones delivering little or no marginal value.
The lesser the project value the tighter the control leading to a vicious cycle of developers cutting corners and increased micro-management.
It sounds to me that what you saw was a conflation of estimates and plans. Which is a common error.