I would just add that probably the reason that you don't see it on "user" knives more is that it has always been a higher cost of ownership in every way you look at it. For starters, its price is usually 10x of a good steel (much less a cheaper one) and that's just the material. Someone concerned with using a knife isn't usually bothered with how pretty it is, just how well does it cut , what type of sheath does it have, and how much does it cost probably come up more often than, is Damascus an option on this knife?.
It's also (traditionally) got a much higher maintenance cost associated to it in that it will rust, no ifs ands or buts. Now, as was stated above, in the last couple of years, stainless steel Damascus has arrived and I really haven't heard too much in review of it other than it's stainless so it would probably help with the rust but no real idea of if it cuts any better. And there is also Timascus, Titanium Damascus, that I have just started to hear about that sounds really interesting to me. But I havent heard anything other than it's coming soon.
Another maintenance concern with Damascus is that with the high-carbon versions you are constantly (once every few months) rubbing/buffing out light rust (or at least I am with the one Damascus knife that I have, and yes I use a tuff cloth and it just slows it from happening) that forms on the surface and eventually you will take off the contrast that was etched in (I can see it happening after a few years, it's not bad now but in a few more years I have my concerns) with a light acid. Maybe not the end of the world and absolutely repairable, but I don't have and light acid (what ever that is) in the home.
In general, the consensus that I have gathered from Makers to Users is that Damascus can cut just as good but for a real user/field knife, go with a good steel, if you want a cool knife that will work nicely, but will cost much more and take work to keep it nice, then Damascus will fit the bill.
Todd
As an addition I would also say that all damascus is not equal. Like stated above a lot of it is made with nickle and it is for looks only, with great contrast between material. If the maker isn't telling you up front about the cutting performance then it's probably intended to be looked at more than used.