MyEclipse must adhere to the same restrictions that the Eclipse platform does. Callisto was the 3.2 release of Eclipse, do yes, upgrading from 3.2.0, to 3.2.1 and 3.2.2 can all be done from the update manager. This is the same situation with MyEclipse (5.1.0, to 5.1.1, etc.).
The reason you may be doing more full reinstalls of MyEclipse is that we release quite a bit more often than most other products and the Eclipse platform which has a major release a year (3.2, 3.3, etc.) while MyEclipse will ship atleast 2 and possibly 3 major releases a year that need a new install due to the update manager not allowing an update from one major revision to another (4.x to 5.x)
That being said we realize the installation story is not being told in the most fluid manner, which is why we started the “what are your most used plugins?” poll 6 months or so ago. We took that information and compiled a list of the most used plugins along side MyEclipse and are expanding the MyEclipse site to include these plugins and other MyEclipse certified plugins that are part of our partner network to be easily accessible and immediately installable.
So say with a new install, you could hit a button, select Subversive, BIRT, TPTP, etc. and hit Install, then import your preferences and be all ready to go.