I haven't participated in any of the discussion about Assume Good Faith, but in my experience, I've usually encountered it when users quote it to claim that criticism of them is equivalent to not assuming good faith.

Does it really solve more problems than it causes?

Judging this sort of thing by how it is cited in arguments will probably give you a skewed view. I can only assume it is read and understood by lots of people who never feel the need to name-drop it.

Dan