Well, vehicles (planes, cars, trains, etc. all use gauges) use them to display data in a very different way than information dashboards.
If we look at the points OP listed:
* hard to scan (insufficient contrast between needle and gauge)
Gauges in vehicles typically have a high contrast (orange/blue needle on black background)
* typically don't show labels/values for boundaries
Labels for boundaries (and in between values) are present
* typically don't show labels/values for scale/units
Units are given (or are implicit; i.e. for the gas tank gauge, I don't really care about the unit that much– all I care about is a very rough estimate of when I'll have to stop at a gas station)
* typically don't show labels/values for alert thresholds
Alert thresholds are clearly labeled, and they are also rarely reached (it is rarer for the typical car to go over 140 MPH than it is for a web server to encounter a critical level of dropped requests, for example)
* even when labels are present, they are still difficult to read quickly
due to lack of alignment
Labels are legible on vehicle gauges in part because a) there are few of them and b) you know what value interval to expect (i.e. when driving on the highway, my gaze will not start at 0 and go upwards looking for the needle, but rather start instinctively around 60 or so)
* when displaying multiple gauges of related metrics, you can't visually
compare them without looking closely
Metrics tend to be fairly independent (i.e. you only ever really need to interpret one at a time) in vehicles.
I'd say it's an historical anomaly that digital interfaces use gauges to display information (precisely because of vehicles), but in vehicles they actually make a lot of sense.
Gauges are not the "comic sans" of dashboard design; they actually are a fantastic solution for a very specific type of information display problem.
But many digital designers resort to them because we are so much used to them, when there are in fact many other options available when displaying more complex/nuanced information. The book that OP recommended (Information Dashboard Design) is a foundational text in that topic and comes highly recommended.
