Alchemy is under-rated? Im guessing you haven't heard of the Restoration loop... Alchemy is single handedly the most OP crafting skill, thats why many people choose not to use it...
Anyways, I use Alchemy on some characters, when it makes sense for my characters backstory...
For me, Alchemy is a clunky skill. I won't deny it's power, but I don't like the fact that, at the start of the game, you are basically told to throw stuff together and hope it makes something. There's often no correlation between an ingredient and it's effects (how does a Butterfly Wing make you a better Enchanter?), so you basically have to either metagame, or hope for the best by combining ingredients together. This isn't necessary with Smithing or Enchanting; with both of them, the game tells you what you need before you start, and there's no chance of failure; if you have the materials, you get the item. With Alchemy, if you don't metagame, you have no idea what you're doing, and you're going to end up wasting a ton of ingredients just to find a few effects.
Like I said: I don't deny that Alchemy is a useful and powerful skill. Unfortunately, the way it's implemented does more to keep me from using it than any amount of glitch abuse ever could.
Even when I had no idea of the restoration loop, I loved Alchemy. I'm old enough to have grown up playing RPGs like Dragon Warrior and Final Fantasy, where the only way to obtain useful items was to buy them. There was no making anything you needed, so in the TES games, being able to make things for little or no cost is still pretty cool to me, especially when it's as useful as Alchemy.
The restoration loop is just a way for us console gamers who love low-level armor and weapons to make them on par with their higher-level equivalents, or to make any follower deathless by way of crazy health fortification and regeneration jewelry. Or, to make oneself uber-overpowered and ruin all the fun.
A little self-control goes a long way with Alchemy.
I use alchemy on characters that have a total aversion to magic, so healing spells are not an option, for example my current character Wulf is level 31 and has never cast any kind of spell-I really enjoy collecting ingredients. I think they should have made more recipes available so it didn't feel so haphazard...of course, it was a good call to allow experimenting by 'tasting' the ingredient. I wayyy preferred this alchemy system over Oblivion's.