There is definitely room for improvement. Tim's workaround is a clever one, which I didn't think of - I found it easier to configure by altering the database row...
I think the biggest improvement required is the one given in this thread (because it's the one we needed here too): the ability to have a block on every course page throughout the site. Generically, you might also want to have a block on (e.g.) every forum page.
All this requires is a change to the 'Page contexts' option so that it additionally lets you select 'entire site' (or ideally 'category' etc) within the dropdown. At present it only lets you select up to course level.
In order to do this, the page would need to check you have permission (i.e. the same permissions it would check now if you tried to do this on the front page or a category page) before allowing those options. Other than that, though, I don't see a problem and it doesn't complicate the interface.
The interface is a bit confusing but I think it has to be in order to be this flexible (which is great btw); I think improved documentation would address the confusing part, or if really necessary it could be hidden behind an 'Advanced' so that this interface doesn't even display normally, but that's a separate discussion.
I filed this as MDL-26709 ( a bit more specific than MDL-26105 - annoyingly when I linked it it says 'will be resolved by' which is definitely not true, 'will help resolve' on the other end is true, but there are other problems with it apart from this one). Feel free to vote / code / etc
--sam