Snoopy wrote:
An AP definitely decreases one’s manual flying skills.
I think this depends on how you use it. Most GA AP’s are primarily for enroute use, even though some are capable of flying ILS’s or similar approaches as well. Yet, in normal conditions, there is nothing wrong, nor is it prohibited by SOP to fly manually whenever you feel it makes sense to do so.
I use my AP primarily enroute and during terminal procedures, where my attention needs to be divided between flying and other stuff. But nevertheless I enjoy flying by hand still quite a lot and obviously VFR there is still a lot of phases where the AP is pretty useless.
Where I fully agree with your statement is in CAT, particularly airlines, where handflying is often almost forbidden. Personally I find this wrong for the very reason you quote: Pilots need to be able to practice manual flying without any fear of reprecussion as long as it happens within the regular parameters of flight. Most airliners are a delight to fly by hand. Accidents like TK in Amsterdam or Asiana in SFO as well as AF 447 show brutally what the erosion in manual flying skills can lead to.
I have flown all the way to Santorini without the autopilot (one of the numerous KFC225 servo burnouts – luckily Justine my GF was there and could fly the plane when needed) but for me the autopilot is a must-have item. I like to relax, be able to take photos, have a pee, and generally enjoy the flight. If I was doing short flights at low level I would not bother about it so much.
Regarding hand flying currency, I am happy with mine, but then I fly once a week. Also I found that when doing any mandatory hand flying (as in IR revalidation) it is essential to disconnect the AP well before the procedure. At least 15 mins before. One flies a lot more accurately.
I keep a spare KC225 computer or two, and a complete set of spare servos so can do a rapid swap 
The biggest problem is that GA autopilots have generally suffered from less than stellar reliability, and almost nobody outside the US knows how to fix them. I actually don’t know anybody in the UK now who understands avionics at the “signal” level (as opposed to just following a wiring diagram), following the retirement of two guys. There is supposedly one guy left but AIUI he is trying to keep his company name (which escapes me right now) off social media – probably in case some job goes badly 
Consequently loads of people fly with broken autopilots, fearing some huge bill if they get someone to look at it. Here we go.
Peter wrote:
The biggest problem is that GA autopilots have generally suffered from less than stellar reliability, and almost nobody outside the US knows how to fix them.
Am ‘curating’ at some expense a KFC200. My old PA28 had a simple single axis S-tec 20, lightweight, practical, reliable!
I don’t fly hard IFR in an SEP so not so fussed about the A/P and I enjoy hand flying. I flew with an Altimatic Vd for some years, and yes it was helpful top of climb and cruise. Not sure I trust single channel autopilots on coupled approaches, but that may be overly conservative.
Snoopy wrote:
An AP definitely decreases one’s manual flying skills.
I didn’t notice that in my case.
One of my IR teacher had this saying: “When flying, always strive to do as little as possible and let systems do the flying, so that when the shit hits the fan, and when you fly IFR you get into potentially much bigger shits than VFR, you have the maximum of your brain and skill capacity available to figure things out”.
I put a good auto-pilot in that category. Even a simple wing-leveler helped me out of a nasty situation some years ago (it’s in the ILAFFT).
Of course you also need to purposefully exercise your manual flying skills.
