I guess it depends on the purpose of using a quotation. My belief is that most people cite a quotation when arguing something as an appeal to authority. "Knuth says don't optimize at all, so we shouldn't do it either." In that case, I think understanding the context is key: if you use someone's words to back up your point, but that's not actually what they meant, then context does matter.

Yes, it's true that different people might need to hear different things at different times. If you're trying to tell someone not to micro-optimize ahead of time before profiling, then quoting Knuth is appropriate. If you're trying to tell someone not to optimize at all (let's say you have a valid reason for not optimizing at all), then its disingenuous (or at best ignorant) to use the Knuth quote.