Using the thumb to fret certainly gives you a fifth card, but it can severely limit the movement of the other four main cards.

Duck Baker does it effectively, but he's worked so much on "unionising" his left hand that it works. Sadly so many guitarists think that anything goes and have just cramped up their left hand for the sake of occasionally using their thumb to raise a third in the bass. I used to do that myself. I just don't think that you can continue to improve like that; without a classical default position.

Davy in later years maintained that using a capo was bad in that it prevents understanding, i.e its not good to play in B-flat and think in terms of another key. Yet he extensively used capos on his early records. By the later mid-sixties he had stopped doing this all together and you can certainly hear the benefits of this in his playing. The music develops to a conclusion. Davy always said that the ascents are more valuable than the descents..   

http://www.youtube.com/watch?v=lZWtNYDz1So

If you compare it with this example of Ralph Mctell playing (which is really just a very simple cocaine blues picking accompaniment pattern, masquerading as an instrumental): the music just seems to start out as it finishes. As Davy used to remind me; perfection is only mediocrity. Just not very good is even worse.

http://www.youtube.com/watch?v=_c6evjH_Oh4&feature=related

In the case of Anji, Davy's original version is special partly for the control of the index finger on the descending bass, and the ascending ornamentations which are led by the pinkie... In later years he played it without the capo and further embellished it.