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So far I've found every card in Dominion has its own niche, but the woodcutter's seems to be exceptionally small. I only buy 1 or 2 if its the only card that gives +buys, otherwise a silver is better 99.9% of the time.
Am I missing a key factor of the woodcutter? Is this the best way to use it?
I recommend the insightful writeup at the Dominion Strategy blog.
It boils down to mostly what you said: +Buy can certainly be very key, so if Woodcutter is the only way to get it, Woodcutter is useful. It also works well with Gardens, but in the long run it's just one of the least useful cards in the base set.
The utility depends entirely upon what's been placed into the initial setup. If it's the only 3-cost card, it's pretty useful.
Remember: some people play with random card selection.
Also, it's a +2 coin and +1 buy action. Silver is a +2 coin, but costs no action. So it's essentially a silver that trades an action for a second buy. Which is wonderful when trying to buy out the villages and other cheap cards.
If your options include villages and mines, having a short deck with village, mine and woodcutter allows grabbing extra copper to convert to silver...
The time woodcutter stands out best is if there is a thief in play. You now have almost a silver that cannot be stolen.
When i play dominion i keep a mental count of how many extra actions i have vs action cards in my deck. If the action number gets high woodcutters become a much better card
