Why use a discrete representation for continuous quantities?

Is there any reason to use a discrete representation (like number of stars) for continuous quantities (like a progress bar)? This is assuming we don't want to show an exact number. (Yes I understand that values in computers are not "truly" continuous, but for the purposes of this question, we'll say they're close enough)

This question stems from my car and its stress-inducing gas gauge. This is what it looks like when full:

The gas gauge is made up of 6 stacked bars, which are all lit when the gas tank is full. This is what it looks like when close to empty:

Now here's where it gets worse. That bottom bar flashes about once per second any time the gauge is down to one bar. In other words, the last fuel bar flashes for ~17% of a full tank. Since I mostly drive full-to-empty, the car seems to be telling me its out of gas 17% of the time I'm driving it (and distracting me with a blinking light)

Now, some quick math to show how stress-inducing this is:

The tank size is a little over 6 gallons. The fuel efficiency though, is ~45mpg average (why I like the car). This means that on a full tank, I have a range of roughly 270 miles.

The last bar on the gas gauge therefore represents ~45 miles of range. To put that in perspective, with commute and all, I drive about 20 miles a day. This means that I can actually drive for 2 full days while the car screams that its about to run dry. When I get in my car in the morning and the bar is flashing, I get to play the fun game of "Can I actually make it to work today?".

All ranting aside, it seems that the obvious solution would be to have a closer-to-continuous gauge. Even if it was just 10 bars instead of six, that gives the user a much closer idea of the actual value.

So, is there any UX reason for doing something like this, or is this just bad design?