No, it's actually great for a lot of situations:
1. DDs should always use HE because their AP won't penetrate anything except other DDs and maybe CVs, and they fire rapidly enough to set fires quickly and repeatedly.
2. CA/CLs should use HE when shooting at anything that isn't another cruiser or a BB of same/lower tier. Against DDs it serves the important purpose of repeatedly damaging their rudder and torpedo tubes, as well as setting fires -- you want to force them to repair and then cripple them again. Against BBs you're going to have trouble penetrating with AP unless they're same/lower tier. That, and because cruisers have many fast-firing guns, you're going to set more fires more often. Against CVs your overriding objective is to set them on fire and keep them on fire because a CV with a burning flight deck can't launch aircraft.
Basically, part of the reason why HE is terrible for BBs is because of how few shells they put out. The chance to start a fire isn't great and you aren't going to cripple components with every shot. CA/CLs, as per above, fire quickly and have many guns. That means that they're going to start a hell of a lot more fires and get at least one damaged component with every salvo; they can set you on fire and keep you on fire. DDs just flat out have no other options.
That said, what I prefer doing in my CA/CLs when I'm fighting a BB is this: Open with HE. Wait until he uses his repair, then set him on fire again. After he's burning for good, switch over to AP for higher damage. The only times where that doesn't work is when the enemy BB is armored sufficiently to stop your fire -- it's easy to notice that since you'll consistently get spalling damage.
But as a CA/CL against another CA/CL it's the same as in a BB vs. BB fight: HE does less damage and won't get you those juicy citadel penetrations, and that rapid fire high-volume shellfire that's so good at starting fires is also good at maximizing the AP DPS advantage and scoring repeated citadel penetrations. 'Course, it's still better to fire HE if that's what you have in the pipe when you see an enemy, just make sure to switch on the reload.