Nabbing a sheer force boost is incredibly situational, and Sheer Force doesn't even boost Psyshock. There aren't a lot of other abilities better than Magic Guard, either. Most of the time you're going to get a Torrent or something. Also, do people really run dual psychic coverage on this thing? I guess we're okay being walled by Sableye and betting on a 70% chance to win against Hydregion and Krookodile (no Dazzling Gleam) or auto-losing to anything with Sucker Punch (no sub / encore)?
Queen does back 50-60%, which is kind of a big deal since it's the kind of Pokemon you would try to switch in and "nab a sheer force boost" against.
That's a fairly well supported argument. Here's why I disagree.
First, those damage calculations are actually not that impressive. A 2hko against all those Pokemon is bad if it's a one-on-one scenario, because every single one can cripple, hurt, or kill Alakazam right back. Blissey paralyzes or poisons and protect-stalls, Florges does severe damage and can outstall if it's physically defensive wish / protect, umbreon ohkos, forretress ohkos, mew burns and stalls (barring SpD drops), Snorlax ohkos, Suicune sets up on you with CM. Now, if these Pokemon are switching into M-Kazam, you then have to predict and hit them with the right move on the switch, otherwise M-Kazam just ends up losing again. Compare this to the very powerful Pokemon that currently roam the tier - CB Victini, for example, outdamages Alakazam against all common stall mons with just V-Creates except for Suicune (Bolt Strike) and has better typing and bulk. Granted, M-Kazam is a lot faster, but that hardly matters against stall. And when you start talking about offense, well, offense has about as much trouble with M-Kazam as it does with M-Aero or Sharpedo (some, but not to a crippling degree).
I do see your point where you mention it's not just about the power, but also about the support. I agree that a Pokemon support capabilities are very important, but M-Kazam doesn't have any that normal Alakazam doesn't. And while Encore is a fantastic move, it's also the most predictable thing in the whole world, which makes it very risky. Even if you successfully Encore a Pokemon, it's just going to switch out, and you're left trying to predict which Pokemon will switch in so you can use the right move.
In my time with the 1600+ ladder I haven't run into a single situation where M-Kazam significantly threatened my team. And I didn't even have any psychic resists (I mostly relied on smart play with scarfers and things like Gligar and Swampert to check it). This isn't definitive proof of anything, obviously, but it makes me a lot less sympathetic to people claiming it should be quickbanned.