Lionel,

1) The coolant circulates through the heater(s) and the engine 
   whether the thermostat is open or closed.

2) The engine has least wear at its design temperature.

3) The thermostat is not binary.  It is closed until the engine 
   reaches operating temperature, and then runs in a partially 
   open state that keeps the engine at the target temperature.  It 
   compensates by opening or closing further in reaction to 
   coolant temperature variations.

4) If the cooling system is working normally, during warm up the 
   temperature rises smoothly to the design temperature and then 
   stays there.  (I understand that in some very cold conditions,
   running both heaters on a vanagon can actually keep the 
   operating temperature below the design point.)

Sounds to me, if your temperature gauge doesn't stay midway, you may have a bad thermostat, or some other cooling problem.

Mike