Thanks Andrew. It's really interesting to hear your perspective. I think you're quite right that planning is key to making the whole process as smooth as possible and minimizing the risk of the client making breaking changes.
I find the biggest client disappointments come when there are changes in client personnel, and the new content editor finds themselves frustrated by limits on their aility to edit content in the fashion they want to. Partly that's a broader Information Architecture issue (the way that content is organised on the site may be out of alignment with their current organizational goals), but partly it can stem from my having taken a fairly rigid approach to the way the CMS was architected. I can see that there are obvious advantages to giving the client greater freedom to edit/move/create content as they see fit.
My only concern is that certain types of content require a certain, more rigid CMS architecture. For example, on a portfolio website there might be a Projects section, and each project necessarily requires a pre-defined content structure (e.g. title, image gallery, year, client name, description, medium, etc). I'm not familiar with Drupal, but in WP parlance Projects would be a Custom Post Type. On the front end the Projects might be displayed as a thumbnail grid, perhaps with the possibility to filter by category. To me, it doesn't make sense for the client to be able to create sub-sections or pages inside the top-level Projects section, since its functionality and navigational flow is quite specific, and not really compatible with a conventional page-based CMS structure.
It's interesting to hear that you haven't encountered significant issues by allowing client to edit the top-level nav menu. Have you encountered issues with clients making poor Information Architecture decisions? Making something a top-level menu item that is better suited as a sub-page of an existing section?
You raised the issue of core software updates. This is something I dissuade clients from doing themselves, because of the risk that an update borks their site and they neglected to make a backup first. Most clients are quite happy to have me make updates and backups on their behalf, and like you that's a service I charge for, though I include the first 12 months of updates (done quarterly) in the project budget as a sweetener.