Every film you ever see will have been graded. You're right that raw LUTs rarely look 'right' - however, when properly blended with the original video they can give you the ability to control the feel and quality of the footage in a way that simple brightness and contrast don't allow. Skies can be blue, vegetation richer and so on - or you can give it a more 'cinematic' feel with a particular palette.
The other factor is that good grading will allow you to combine footage from different sources, or different flights without getting that jarring feeling that you're watching two different events. It's an art that I barely understand, but moving seamlessly between handheld and aerial shots without feeling that one camera is 'worse' than the other one is a big deal.
Most LUT demos make it obvious that colors have been radically altered, but when properly used, they should just improve the atmosphere.
Here's a LUT demo that is intentionally obvious (it's showing what's possible rather than keeping things subtle) - I have a tool that allows you to color grade video on the ST-16, and put in scripted effects for quick client edits. Pause it around 1minute 10 and you can see the difference a LUT (on the right) can make :
There is some question whether LUTs would help with 'false color' vegetation images for agricultural surveys, but I haven't had a chance to investigate that.