I think it's too harsh to call blue magic in this game 'useless', it made Quina a pretty useful character, and he/she collects it in an 'interesting' way. What about Limit Glove? You can use it fairly early in the game and it deals 9,999 damage. I like that you can only use it when Quina's HP is 1, can be easily done with Auto-Life, also a blue magic. I find this an interesting technique without being a straightforward attack. Level 5 Death is the only way to finish one of the side-quests, I don't remember which one (crappy memory), but I'm pretty sure it was the case...

I didn't use blue magic all the time, but I wouldn't call it useless =)

One note about the scattering characters thing, I played VIII and IX before playing VII, so I thought that it's the way the games rolled; the characters you don't play with remain at low level... and it still bothered me a bit, even with no comparison to previous games.

I kinda find it hard to pick things I didn't like about IX and they don't compare to what I did like!