Actually, this ability makes it so that even revenge killing isn't always necessary, since Ditto can use the defenses, resistances, and immunities of the Pokemon it's switching into to ease the damage of the attack if you predict correctly. Not too easy to rely on, especially against boosted opponents and when taking Ditto's low HP into account, and when you consider that if Ditto can copy one of the Pokemon's moves to use against it effectively, that Pokemon can use the same move against Ditto to just as great effect. So you have to be careful, but it's still a great option to have, perhaps in other situations as more of a standard Choice Scarf counter. For example, it can absorb Heatran's Fire moves and counter with Earth Power just like any other Heatran.
Also, Ditto has enough PP to sweep a full team if it copies something with Outrage, although the confusion might be a problem. However, teams don't stay full the entire battle, and Ditto probably won't be one of the first Pokemon you send out.