Why is the state of an LFSR not output?
LFSRs are very useful as building blocks of ciphers, with some nonlinearity introduced. For example Trivium is a very strong and fast cipher, which includes a little amount of quadratic nonlinearity in 3 coupled LFSRs.

An example of bad use of LFSRs--and by no means the only one--is the A5 series of ciphers, of GSM fame, where majority clocking does not include enough nonlinearity/unpredictability.