I completely agree there is a problem. As for your solution, I have to spend more time rereading it before forming an opinion but... yes. Major problem.
I spent Christmas working on the documentation for installing catalyst on a shared server. It is *not* easy. It needs to be, or this technology just won't get adopted and will die. The catalyst approach for this is, use CPANPLUS... but CPANPLUS, though better, is still not that user friendly.
What my gut wants is, default installations for CPAN and CPANPLUS without having to answer all those questions, working 90% of the time, on a shared hosting environment. Because that's the reality, lots of people use shared hosting. I was able to make the CPAN install pretty painless by accepting the defaults and editing Config.pm after the fact, but I wasn't able to do this for CPANPLUS.
I guess the bottom line is, all those CPAN/CPANPLUS install questions are intimidating to people who just want to start developing, and they will switch to other solutions if this doesn't get streamlined.
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