Interesting thread here, I think that this subject has been discussed before?

For sure, those particular stems from Nitto, end up being longer than stated on the packaging, which is an oddity.

But there are two very common other ways that stems are measured, always parallel to the extension by the way.

Lower-end and Japanese stems, with few exceptions, measure stem extension "drafting board" style, which is center-to-center, along the centerline of the extension.

Higher-end, mostly Italian racing stems measure them across the top, from the center of the bolt to the center of the bars.
I believe that this is because actual racers and coaches are the ones who might actually make field measurements, and measuring on-center instead of across-the-top is mechanically awkward to achieve. So this is for serious users, not so much for parts-spec'rs sitting in a chair in their office.
The "Italian way" as I call it gives about a 5mm-longer measurement, so yields a 5mm-shorter stem in the real world, and this applies to all Cinelli and TTT stems and most ITM stems as well. Gravity-cast ITM stems turn up which are measured the "Japanese" or "drafting table" way, so will net a longer actual stem.

Most Nitto stems seem to be measured the "draftsman's" way, however the Nitto-made Shimano stems measure the "Italian" or "field" way, across the top, so will come up 5mm shorter as mounted.
(I've also noticed that most such AX/EX stems will accept a 26.4mm handlebar, fwiw).

Rhm mentioned measuring stems perpendicular to the quill, which makes the most sense since this is perpendicular and thus independent from the adjustment of quill height!

My own way of tagging my stems (after first grouping them by clamp diameter) is to add an "A" suffix to my written "95" or whatever, and which means "actual" or center-to-center on-center (drafting board style). This is just because I started out with a lot of cheaper equipment way back then, and the Japanese stems measured this way.

Nitto's "sometimes" way of measuring the perpendicular offset makes the most sense, but never caught on with the industry.

And like Yang07 mentioned, how the bike fits on the road (with the actual rider balanced fore-aft over the bottom bracket axis) is all that matters, at least within any particular range of riding intensity.