Just to reiterate my reason for making this feature request, before getting into workflow preferences:
I think Outliner is a great way to organise your model and geometry, it gives you an overview, lets you drill down, lets you move groups into fitting subgroups, lets you show/hide, search. It is far beyond a selection tool, it is also an organisational and overview tool.
Outliner AND Layers are great companions and should coexist in a way that allows and encourages different workflows. That’s why I think it would be a good idea to represent geometry on hidden layers in the outliner.
Onto my workflow preference: I’m working a lot in the Outliner, because it represents my mental model of my Sketchup model. It is hierarchically nested. Show/hide objects work great in the Outliner, but, as pointed out, not so great using the menu. IMHO, hierarchical/nested organisation is contemporary, and flat layer organisation is old school.
One interaction between Layers and Outliner could be like this: In a project, I want high poly geometry for final presentation of details, close ups and perspectives. For working with the model, I generally want low poly geometry. So low poly and high poly can get one layer each, and as I work high poly layer is hidden. When finished with the detailing of a specific part of the model, I assign the detailed geometry to the high poly layer, and keep working on other parts. When setting up scenes I might want to show some people, trees or buildings and hide others, depending on viewpoint, and I do that in the Outliner. When presenting, I turn on the high poly layer.
Everyone got their way of working, what makes sense to them, so I’m certainly not thinking my way is the greatest. I think Sketchup should accomodate and encourage different ways of working.