Yes, he does only cover the "highlights" of a country. And he uses his judgment in selecting what he thinks are the "best" places in a country.

His audience is Americans. How many Americans do you know who have the time to hit more than "the highlights"? We're not a country that typically takes 6 week vacations.

Obviously, if you're going further afield, you can't rely on just a Rick Steves book. That said, no sophisticated traveller would limit him or herself to just one information source anyway.

For what he does, Steves does very well. I occasionally run into another guidebook author who is as dedicted as Steves (Andrew Doughty's Hawaii "Revealed" books come to mind), but Steves has the most titles.