I would disagree. I do believe that technical exercises eventually become useless and wasteful, but think that sets like Donhanyi and, more particularly, Liszt, are for advanced students who want to solidify their technique. A beginning student who doesn't know how to practice properly doesn't just "have technique" right from the get-go, and so it has to be developed. No, technical exercises are not the only way to go about refining technique, but they can make the process easier because they focus on certain particulars in the aspects of technique, and if practiced correctly, can help to develop remarkable understanding of the technique in the pianist; that's why it must be an advanced student. If the student knows what he's doing with the exercises, he can practice to his advantage; otherwise, he'll just hurt himself by practicing incorrectly.
Technical exercises aren't exactly essential, but I think there's more to them than is fashionable to say in today's world. If one practices them accurately and with a focused mind, he'll definitely receive benefits for his hard work, or more specifically, his technique WILL improve. These exercises are non-musical, yes, but since they are so concentrated and oftentimes more difficult than standard musical passages, they are extraordinary in their ability to build up reflexes, flexibility, and independence, which helps in difficult pieces and even to a high degree in sight-reading.
But, yeah, I do agree that after one has mastered the exercises, more or less, or at least has a "rough idea" of what is to be learned from them, he shouldn't spend his time repeating them.