Yes, when I've used the input tester, I've seen that actually the outline of my nub's travel is clipped and is actually somewhere between a D and a proper O. Either that or it's not moving at all in one axis. When I'm actually looking at it, the nub dance seems especially ineffectual and you can be doing it for dozens of seconds and having almost no effect, which helped prove that if it ever worked it was likely wishful thinking.
Resetting the nubs does work, but only for less than 30 seconds before they go wrong again, I've found with my nubs. Since it takes something like a dozen seconds to get into the pandora settings applet, and I never got round to scripting it, you actually eneded up spending much of your time opening the applet and resetting them if you need them. I guess if you're using a desktop application, you can actually leave the window open and alt-tab back to it, but if you're using them in a full-screen game it's not practical to keep resetting them like that.
But I've had differing problems or lack of them in different games for reasons I don't really understand. I gave up playing Super Stardust back in the day because of nub troubles, but nub nub generally worked well. More recently, I was able to play oolite to fly around using the nubs. It probably helps that my nubs almost always center at 0,0 so an offset isn't what I'm looking for really.