Was Donald Knuth completely wrong about good programming practice?

Programming practices vary over time and depend on the preferences of those writing the code. There are some, myself included, who believe the naming conventions and organization of the code should be meaningful to make it easier for other developers to read the code. Typically, if code is complex, a comment might be justified, though it often indicates that the code needs to be simplified. Typically, if I write a comment, it will mostly be something along the lines of why we took this approach or any dependencies that aren't obvious. That said, documentation comments (e.g. classes and methods) are useful for automated tools that help developers see API specs or automated swagger/openid UIs.

Literate programming is not really comments, rather documentation and code combined. Whether that's a good idea is another question, it never really caught on. But when you have TeX and TAOCP in your back pocket, a couple of flops is no great shakes.

> Nowadays, programmers are encouraged to write code with minimal comments

No, they aren't. Find a better hobby than asking absurd questions several times a day.