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I think the danger is people with considerable XSLT 1.0 experience assume that they can do everything with XSLT 1.0 and that moving to XSLT 2.0 adds unnecessary fuss (and expense). XSLT 2.0 makes more powerful processing much simpler (bye bye Muenchian Method).
You can do really wonderful things with it. For example:
IE7 feed reader clone (http://www.w3.org/2005/08/online_xslt/xslt?xslfile=http%3A%2F%2Fwww.bris.ac.uk%2Fips-projects%2Fportal%2Fpilot%2Fteam%2Fmark%2FXSLT2%2Fie7feedread-emulator.xsl&xmlfile=http%3A%2F%2Frss.microsoft.com%2Fdefault.aspx%3FId%3D584ef2b0-1365-430a-b6a9-44fa32fa6779&content-type=&submit=transform) using only XSLT 2.0.
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