Well I got to the bottom of how a users data disappeared upon update of my app. I've learned that the problem was due to storing user data to a file within file.dirDefaultExternal.
I've learned that this default directory under particular circumstances can get deleted when the apk is updated. This is particular apparently to some devices running Android 2.2. A post regarding this can be found here
Data/files erase on installation
So I have at least one case where if I put out a new apk update to fix this bug, it will with certainty cause user data to get deleted. Unfortunate because it injures my credibility. I warn others because if your testing device isn't 2.2(froyo) you wouldn't have any idea that putting a persistent file within file.dirDefaultExternal can have consequences.
To fix this issue I will copy the files stored in the defaultExternal to a custom directory and no longer use the file.dirDefaultExternal directory.