Death magic is one of the last places that needs to be looked at for upgrades (IMO) and not everyone considers this useless. I've used it, but I'm on the fence every game whether to make one only because a *few* other death spells/items are *incredibly* potent & cheap... not because this is useless. Edit: There are several spells/items that have a high(er) opportunity cost so why not upgrade the less potent & less diverse magic paths before making death magic even more powerful?
I tend to use it in games where I have death mages, but not very powerful ones or lots of death gems. Unlike, say, a Bane Blade, there's little risk of loss.
Again, its often useful in times of peace. And then, while it might take a long time to gain an experience level on its own, it may be all you need after a large battle to bump experience up a notch.
Ok, but that is a good use. Your new thugs who wait a few turns all those +1's in their first battles, without using any magic slots during combat, and you can share the skull behind the lines essentially forever.