Correct.  The timestamp is not intended to be "precise", nor is it intended to be monotonically increasing.  Anyone that thinks otherwise is mistaken.  Any service that attempts to tell their customers otherwise is lying to them.

The only intended purpose for the timestamp is to approximate the amount of time that it takes for 2016 blocks to be created so that the difficulty can be adjusted appropriately.  An error of a few hours over a time span of 2 weeks is not significant and would work itself out over multiple difficulty adjustment periods.

However, what we can say with absolute certainty about the blocks is that blocks of greater height were absolutely created AFTER blocks with lesser height.  So, if you establish a proof of existence with a transaction in a block, and then someone else attempts to establish a proof of existence in a later block, we can ALWAYS determine who attempted to establish that proof of existence first.

Additionally, since the timestamps are accurate to margin of a few hours, if you establish a proof of existence with a transaction in a block, you can confidently state the year, month, and day so long as the block doesn't occur within a few hours of the border between 2 days, months, or years.  If you add a few hours to the timestamp, you can confidently say that the proof was established no later than that.