GoneWest,
Priort to 9/11 most pilots did not monitor 121.5, now anyone with a second radio monitors it, which now just about ensures that if someone yells may day someone will hear you.
You are right that Pan Pan is rarely used, in fact I haven't heard it used by anyone since 1976.
Seriously, I would rather someone squawk 7700 and yell mayday and broadcast that they are having a problem, like someone said, it is far easier to downgrade an emergency than upgrade it at the last few precious seconds.
Mike R