I believe that diagrams are at their most useful when they are deployed as a communications tool. When discussing our software, we commonly draw a diagram to help illustrate how functionality is divided up among components, and to show which components are impacted by particular functional chains. They are a powerful tool for communicating and coordinating the work of multiple people or multiple teams. If our software does not provide us with diagrams itself, then we will commonly create them ourselves in our technical documentation or on whiteboards as an aide to collaboration.
However, as we descend in our system towards finer and more detailed levels of granularity, two things happen. First of all, fewer people are impacted by very ‘local’ design decisions, so the importance of communication diminishes. Secondly, the frequency of change increases, so the importance of mutability and ease-of-editing increases.
The requirements that we place on our engineering tools depend largely on what we are trying to do with them. Communicating and coordinating work across a large engineering organization places fundamentally different requirements on our engineering tools than does, say, working alone to solve a challenging problem that requires the creation of new concepts and abstractions.
There are many different ways to work with software, and although each share much of the same flavor (dealing with informational complexity), the nature of these challenges is often distinct enough that the different requirements may lead to vastly different solutions.
For my part, I have a lot of faith in the general utility of tools which allow for the easy generation of diagrammatic representations of high-level structure, but which naturally decay to a more conventional textual representation at finer levels of granularity.