@dpcon said:
On a simpler level: notation should make things easier to read not harder.
True. Key signatures are omitted when an abundance of accidentals do more to confuse the eye than anything else.
Let's say a score had 5 flats and it modulated throughout or were polytonal or heavily modal. There could be passages in which four of those flats could be natural'd for an extended period and the remaining flat would probably require a courtesy accidental anyway. Works such as this might benefit more from having no key signature.
But many people prefer to work with a key signature just to define a tonal center rather than the modality. The danger is that if the work is constantly moving its tonal center, protocol would have it to add more key signature changes. It is not impossible to encounter a situation in which one finds himself adding a new keysignature at every barline.
The hybrid method for works with extended modulating episodes is to cancel the key signatue at the appropriate moment, then restore it as needed.
Much of this hinges on personal taste as well as the nature of the score's harmonic structure. I'm not one to adhere to textbook conventions when and where such protocols create visual disorder as well.