>people do still manually indent or rely on their environment to indent it for them
Nobody manually indents their code. Almost any language other than Python is unambiguous to indent, so the computer does it for you.
>I for one cannot read Java without it also being indented correctly.
That's easy, just copy paste Java code into an editor and press a button to indent everything. Voila! Good luck if you're dealing with Python code which got misindented somehow (e.g. copying from some social network website which uses markup that doesn't preserve whitespace, which is most of them).
>What tools are you using that don't do indentation for you?
Python code cannot be re-indented unambiguously. So if you copy paste a chunk of Python code from one place to another, you can't just press a button to reindent everything. You have to painstakingly move it to the right level and hope that it still works. In Common Lisp I just press Ctrl-Alt-\ and everything becomes indented correctly.
>The most you have to do is hit backspace after finishing a block.
That works if you only write new code and never have to change existing code.
>There's a reason environments highlight do-end pairs together: because it's hard to know which ones match which.
No, the open/close brackets allow the IDE to highlight them so that the programmer can clearly see the scope of the code block. This is a useful feature of the language. In Python it's almost impossible to see which deindent matches what if the function is long enough/deep enough.