Callback hell is a "loss of composition" problem. Most languages, including JavaScript, have things called expressions. Expressions rely on functions returning their output. They become useless when functions give their output through a callback passed as their input: they don't compose with that frankenstein.
Node style callbacks are a prime example of how in the quest for "simplicity" and hate for abstractions its easy to build a monster / frankenstein like caolan's async. Node callbacks were a self-contradicting philosophy: it abandoned all thats already in the language in the quest to avoid an abstraction that was not already in the language :)
Hrm, it's always seemed natural (and not frankenstein) that a function would be input as much as a number or string is. 'My name is Steve, my age is 7, and here's what do to one the database has saved'.
That said I see how the inconsistency you're talking about with how expressions return values with callbacks and you've certainly put the point very well.
Node style callbacks are a prime example of how in the quest for "simplicity" and hate for abstractions its easy to build a monster / frankenstein like caolan's async. Node callbacks were a self-contradicting philosophy: it abandoned all thats already in the language in the quest to avoid an abstraction that was not already in the language :)