I've been using the 100-400IS for about 7 years now. When I got my 1Dii 3 years ago, I had the lens and the camera optimized by Canon. As you know, it is possible to get a camera that is within factory specs but at one end of the acceptable range, and a lens that is at the other. Apparently, Canon did a great job with my camera/lens combo.
My 500L 4.0 certainly blows away the 100-400 at max aperture and is sharper and more contrasty, period. However, careful focusing with the 100-400 enables me to get perfectly acceptable bird-in-flight shots at 13x19, especially with judicious use of Focus Magic and PKOutput sharpening. I don't oversharpen, and I have never got negative comments about the softness of the lens. I also find that to get enough depth of field to keep a bird's beak and eye both in focus, I seldom use the lens wide open.
I also do a lot of city shots, and have found nothing better than the 100-400, which I use in combination with the 16-35L, another "problematic" lens. 90% of my city shots are done with these 2 lenses, and I know their limitations.
My biggest gripe about the 100-400 is its ability to suck in dust when I zoom rapidly from 400 to 100, but I do like the push-pull action on that lens more than a rotary zoom ring.