I was just thinking about this in the gym (how very non geek). The reason I used to use these type of questions was it was the default with the commercial VLE I was working with. From a teacher perspective I was mainly (exclusively?) interested in formative assessment, i.e. working out what they did and did not know and where they misunderstood things.
Analysing the results from questions where credit was only given when all correct options were selected was difficult. As I said the students resented not getting credit for the items where they had shown correct knowledge, they were mainly aged between 16 and 22. Giving feedback on each item as you do is a very, very good idea.
But existence of the "all or nothing multiple choice" question type shows the glory of Free/Libre GPL software where people can create solutions that address their requirements. I really don't like it when software makes assumptions about how I am going to use it, it is amazing the variations on peoples needs.
I created a version of the Cloze question type (called Gapfill) and have been delighted with the different ways people have used it and the requests for features that I could create that allowed it to be used in ways I would have never considered.
I am working on a new release at the moment that has a tiny new feature that can really enhance how it is used. I would never have thought of it unless someone had asked in these forums.
As I mis typed in my last post, it's your teaching, your questions, your quiz, your pedagogy, go for it.
In the words of the philosopher king Martin Dougiamas "Moodle loves teachers"