The number of times I have had to abandon third party software (even from large software companies) because an update renders it unusable, is pretty high.
Luckily, I see those very rarely. Java being one I remember a couple of years back, but I haven't even installed Java on any of my computers now, due to that long-standing bypass-sandbox issue which Oracle didn't seem to worry much about for ages (is that fixed in the mean time?).
MS Office update-destroyed itself once about 10 years ago, but I've not used that software for years either.
I remember having update troubles with WorldMachine 2.2 Pro when it came out, but that was merely the installer being bugged and not finding the installation (the program still worked, only didn't upgrade).
Here is an example of what I think is wrong with auto updates:
Thunderbird just (few mins ago) came up with a notification that it has a new version available. Consequentially, I click on "OK, upgrade" so it stops bugging me. Some progress bar comes up while it downloads stuff, and then UAC prompts me "Do you want to allow Thunderbird to make changes to your computer?".
Which is the moment I'm starting to shout "Fuck, no. I don't want to allow it to make changes to my computer. I want to allow it to update its own executable, and nothing else. And above all, I certainly do not want to run a program which connects to the internet and receives emails as administrator". But I have no choice but to click "Yes" because it will not otherwise work, and it will keep bugging me, rendering the computer unusable.
Now if this was "Microsoft Program Update Service" telling me: "A new version of the program "Thunderbird" is available (Version blah, [security update, recommended], signed by Blahblah). Click here to show a list of pathnames that will be overwritten/modified." it would be an entirely different story. The system's update service doesn't receive emails with malware attachments, so giving it administrative privilegues is a lot less risky. And with a slightly more intelligent, more fine-grained security system, updating non-operating-system programs should not require admin privilegues anyway. It is also highly likely that a system-wide updater that is used daily by hundreds of million users is mostly error-free due to its test coverage (much more than your selfmade updater as an indie developer if you have maybe 2,500 users alltogether and do three updates per year).
But of course that's only desirable if it works for every program, not just the ones that comply with some haphazard company policy and possibly have to acquire permission or a "license", and if it itsn't maximally obscure (like it usually is, unluckily).
It is for example possible to update nVidia display drivers in this exact way even under good old Win7, using standard Windows Update. Except of course it's a maximally obscure hidden process, with "install everything" settings, even if you have opted out installing PhysiX and that new video recording and mobile streaming stuff previously.