Really, this thread isn't the place for arguments over Milotic's viability, that would be Milotic's analysis. Please don't discuss that stuff here, Fuzznip made a post a while back explaining that it should really only be used for a few things. But, having used Milotic, I will address your points. Milotic's role is on Hyper Offensive (usually Deoxys) teams. It fills a similar role to Bisharp, punishing your opponent for using Defog. Milotic can actually hit quite hard, and it's an effective alternative to Bisharp or Thundurus as a Defog punisher if your team needs a special Pokemon instead. This is not a small niche, it's a very common situation to have your opponent trying to Defog against your team, and Milotic is good at taking advantage, is reasonably powerful beforehand, and is quite powerful if it gets a boost from that.
Also, a general note. If you're bringing up a Pokemon like Spiritomb, Wigglytuff, or Accelgor that either didn't get an analysis last generation or lost its niche from last generation, simple theorymon won't be enough for anyone to take you seriously. A while back, when I was getting started on Smogon, I made a case for Umbreon here. At first, I just made my argument based on my experience with Umbreon (which is also something lacking from your proposals, you guys don't really give any indication that you've tested these Pokemon, since your strategies are, for the most part, unreliable at best) but that wasn't nearly enough, so they asked me to provide some replays. You need to show that the Pokemon you're suggesting, especially if it's an unlikely choice in OU, works in practice consistently against reasonably skilled opponents. If you can't do that, then you either don't have the experience to be writing an analysis for it, or the Pokemon is not viable.
Also, a general note. If you're bringing up a Pokemon like Spiritomb, Wigglytuff, or Accelgor that either didn't get an analysis last generation or lost its niche from last generation, simple theorymon won't be enough for anyone to take you seriously. A while back, when I was getting started on Smogon, I made a case for Umbreon here. At first, I just made my argument based on my experience with Umbreon (which is also something lacking from your proposals, you guys don't really give any indication that you've tested these Pokemon, since your strategies are, for the most part, unreliable at best) but that wasn't nearly enough, so they asked me to provide some replays. You need to show that the Pokemon you're suggesting, especially if it's an unlikely choice in OU, works in practice consistently against reasonably skilled opponents. If you can't do that, then you either don't have the experience to be writing an analysis for it, or the Pokemon is not viable.