Been a while, but I've done some application development for Notes and Domino. From an application standpoint, some things that are difficult to impossible in other frameworks are easy. On the other hand, some of the things that are simple in other environments are a downright PITA in Notes.
Either way, application development in Notes is a massive sink hole in terms of time and arcane knowledge. Most of the developers I know that do Notes don't do much anything else - Notes eats up all the unused brain cells to store the trivia (i.e. the knowledge necessary to make the apps run efficiently). Seemed like I always ended up in C++ with the Notes API's whenever I got into a corner.
As for document storage and retrieval, Notes could be used well for that purpose. Like any other Notes app, I would only use Notes if and only if it was being used for other purposes within the company (like being the primary email backbone). I've never considered it wise to hang a single application off of Notes - though if you already have it in place it can be something good to build upon.
Similar to your situation, I'm also looking for a document repository. We've got rows of file cabinets holding paper documents that I'm trying to get a solution for scanning in, converting to pdf and then using some third party tools for search and retrieve. At the moment, I'm leaning towards Docushare from Xerox, but a lot depends on the budget (things are lean at the moment).
I haven't seen a lot of third party tools that automate the front end process of scanning documents. I've just about come to the conclusion that I need to write my own using the standard TWAIN interface (which is also a PITA for any language other than C).
Speaking of which, does Acrobat have the ability to automate the process of PDF file creation? I'm bringing the images in from the scanner in TIFF but I really need to immediately gather them into PDF format. Wondering how good Acrobat is at minimizing human intervention in the process?