Fragmotion and Milkshape have been designed for game programmers

Yes, but some programmers are successfull using Sculptris for example, a very simple to use sculpting tool.
But for retro games or minecraft style , yes why not ?


People may feel smart to use Blender but 90 % of its features are of no use
It depends on people and what they do.
People making advertisments or short films , renders etc ... will use lot of features indeed a game programmer won't use.
But i can assure you i use a good amount of it's features :
-Modeling
-UVMapping
-Texture painting
-Rigging
-Animation

I recommend really Blender, it's not so hard once you get it, it becomes very very repetitive.

There is for modeling cool tools for programmers like :
- Google Sketchup
- Silo 2 (cheap price and great features, very easy workflow)
- 3D World Studio (BSP modeling and lightmapping)
- Metasequoi modeler
etc ...