The pinching around the joints is mostly a problem when skeletal vertices only use single bone weights, i.e. each vertex only allowing itself to be controlled by one bone. Although models tend to do fine with single weighting for the most part, our skeletal code allows multiple weighting; as many weights as you need for a particular vertex. It's not something you should abuse to extremes (for efficiency reasons), but if you want to use two or three bone weights for the vertices near knees, elbows, etc., then there's no perceivable hit and it generally solves the pinching problems.

Also, I should note that our model code is not restricted to skeletal; we do support frame-based vertex animation in addition to skeletal animation, for people who are doing simple models that don't need bones or doing things where bones just aren't appropriate for whatever reason. Obviously models that are using frame-based animation will not support certain "features", like blowing off sections of the model, but still the choice is there.