Understanding of Named Instances
"Named instances provide complete database isolation while allowing consolidation onto the same server. But it is a bitch for back-ups. Each instance must be maintained separately from the other instances on that server"
Have you missed the point named instances entirely? Of course you have to maintain them separately, that's the whole point! Each instance isn't just a isolated session of a single installation of SQL, it's a completely separate installation of SQL. You could have multiple identical instances, or you could have each of them running with a different version, 7, 2000, 2005, 2008, or even different service packs. Server\Instance1 and Server\Instance2 are in no way shape or form connected to one another, other than they both reside on the same server, and as such have to be treated, backed up and patched accordingly.
I'd be concerned about anyone happy to just role out a patch / service pack to multiple instances at the same time in a production environment, rather than properly installing and testing them individually.