I think you make some very good points, but I think there's still some value in the manager README even if it's flawed. It would be great to have both IMHO.

I'm thought experimenting on also having a README written by direct reports that the boss doesn't get to see (so people could be more honest). I'm guessing it would quickly leak to the boss anyway, or someone trying to score points with the boss would just whitewash it. Perhaps only the person who wrote something could edit it, so you get lots of perspectives?

Would be an interesting experiment tho.