Writedowns do cause pain. They can wreck homeowners' credit ratings, but this can deter them from future borrowing that may prove unhealthy. They wreck the MBS/CDO holdings of investment funds, which in turn means pension plans will be underfunded and fixed-income retirees will get smaller checks. There is no free lunch in a nation carrying many forms of massive debt.
Mortgage principal writedowns can sometimes be a fair thing to do. They preserve the legal essence of a debt contract and assure the creditor that at least some of the outstanding principal can be repaid, and let an underwater homeowner stay in their house. Sovereign debtors do it all the time with their bonds. Greece is negotiating haircuts right now with European banks that own its debt. If it's good enough for nations, it can be good enough for homeowners too. Someday creditors will learn not to loan money to borrowers - be they nations or households - who have no hope of paying it back. Until then, writedowns can take some sting out of poor lending decisions and allow parties to save face.
Nota bene: I do not owe any long-term debt, and I do not carry revolving credit card debt because I pay my bills in full as they come due. I cannot benefit in any way from mortgage writedowns because I have never taken out a mortgage.