I'm very impressed with this thread, both by the clear and intelligent question and by the various responses.

I've hiked the Camino twice, and can say that ponchos are pretty popular there, often really beefy, large fully enclosed units that I suspect don't breathe very well. I preferred a regular rain jacket for that hike, partly because I found it sometimes nice to have a "normal" jacket while walking around town towards the end of a day --- with the hiking part done. I went with a lightweight jacket, something like an OR Helium 2, doing double duty as both rain gear and as a windshirt. What I sometimes found helpful on the Camino was to wear the jacket backwards when it was very windy --- could let perspiration out from my back that way, yet cut the wind. Some sort of cord with clips can be handy there to keep the jacket upper collar area from slipping down.

Yes, with a rain jacket under pack straps, that part of the jacket wears faster, and loses waterproofness faster. Oh well! I too am in the camp that you can't stay perfectly dry when hiking for hours in the rain. It's about temperature control. Another nice thing about a rain jacket is that it's easier to find a place to hang it up to dry in an Albergue or whereever. Even just stopping for a meal and hanging it over a chair back will allow a lighter rain jacket to get a start at drying out.

Let me also say that the vast majority of people that hike the camino sleep indoors every night. In my experience of that sort of hiking --- in England and Austria as well as on the Camino --- if I know I'm sleeping dry and can hang my stuff to dry out at night, then I just don't care all that much if I get wet during the day. It's about temperature control and of course keeping my gear dry (so a pack liner is a very good thing).

There's no single answer to this stuff, however, we each of us have to listen to differing views and then grope our way to our own personal ideal I'm afraid!