I strongly disagree with that. It doesn't suck.
In any case, application manager is an interface to the Debian package management system, which is basically very good. The point is thus that as long as you have your repositories (catalogues in application manager speak) in order then they will be preserved by a restore after upgrade. You'll still have to re-install though, but that's pretty painless if you don't have to hunt for repositories or .install files (it took me all of fifteen minutes to reflash, restore and reinstall all my software from repos after the previous firmware upgrade).

If at all possible one should IMO install from repositories when possible, install from .deb only when that's the sole alternative. In the latter case you should then also keep them collected in a directory on a memory card, for easy re-installation.