When utilized properly, Baby Pokemon are good for in-game balance. They are useful in the sense that they allow for Pokemon lines to be introduced much earlier where their base forms would have been too powerful to both fight against and use yourself. It's an appealing notion to be able to catch and raise a Baby Pokemon early on and being rewarded with its base stage well before you're allowed to catch them in the late-mid to late game.
That said, there ARE bad Baby Pokemon. Pichu, Cleffa, Igglybuff, and Azurill are all mechanically useless since their base forms are already balanced for early-game. No one has ever been bewildered or trounced by a wild level 5 Marill.
Wynaut is debatable due to its gimmicky nature and it evolving quite early.
The prospect of Pokemon only being able to learn certain moves in their Baby stage is actually pretty neat, but Incense breeding is dumb.

Gamefreak is too braindead to utilize this well for the most part, but the few times they do pull it off makes usage of Baby Pokemon quite enjoyable. The few romhacks I've played certainly have done it better.