But in common parlance, I think the phrase "Ich entschuldige mich" is really meant more to say "I apologize" than anything else. I guess this could be a place where descriptivists and prescriptivists differ in their interpretations (and I lean a bit more towards being a descriptivist).

I haven't studied German society closely enough to know what people really mean with this phrase, but this is how I've always interpreted and used it, and other people seem to use it in this manner as well.