Even the best functional programmers I've seen fall
back to some kind of exit-or-exception semantic in
the None case.
I offer two responses to this. I'm going to use Jane Street's alternative Core standard library for OCaml (
http://janestreet.github.io/) in my examples, because that's what I'm most familiar with.
First, consciously raising an exception is far, far better than having an exception raised without you being aware of it. I can search OCaml code for all of the instances of raise, failwith, and _exn, and end up with a reasonable understanding of when my code might conceivably fail. I can't do the same thing in Java, because many of the functions I'm calling might return null.
And it's really not that hard to deal with optional values when you have them. Sure, it's slightly more verbose than not having to deal with null, but in practice you have to write a bunch of if statements checking if things are null everywhere anyway.
Also, most languages don't have good abstractions for dealing with nulls despite them being everywhere, so they're always painful. Languages like OCaml and Haskell do have good abstractions, so you can often avoid a lot of the verbosity: if you have an optional value and really do want to raise an exception (usually only in scripts/smaller programs), wrap your value in Option.value_exn. If you have a reasonable default value, call Option.value ~default:(...). If you have a bunch of optional values together, you can sequence them together with Option.(>>=), because Option is a monad.
Second, there are alternatives to raising exceptions in the middle of big programs. Consider the Or_error library (see https://github.com/janestreet/core/blob/master/lib/or_error....), which is a part of Core. Rather than having a type like Option everywhere:
type 'a option = Some 'a | None
It also has types like Or_error (defined approximately like this):
type 'a or_error = Ok 'a | Error Error.t
Error.t is a very useful type that lets you lazily construct error messages from values, so that you don't pay the (often high) cost of serializing things into a human-readable form until you actually decide you need the error message.
What this lets you do is write your code inside the Or_error monad. Because it's a monad, it's very easy to sequence error-generating operations together, and you don't have to check for errors unless you explicitly decide you want to.
Often, you can do something useful like log the error to a log file or display an alert, rather than killing off the entire program. Sometimes, of course, an error is bad enough that it should cause the program to die, and then you can make it terminate with Or_error.ok_exn. But that's relatively rare. If you're trying to write robust systems, many errors are things you can deal with intelligently, and having those errors encoded in the type system ensures you don't forget to do it.