OP, I agree with a ton of what you're saying but there are two particular points to which I would like to make a counterpoint.
1. Somebody else pointed out that it's effective to use shatters just as a phantasm skill is about to recharge, losing little or no tempo in the process. One of the central arguments in my objection to the current design of the Mesmer is that the shatter mechanic caters only to a small number of builds. I think that this explanation offers hope that the shatter mechanic is not fundamentally exclusive.
Let me aks you a question. You have 10k health, and the stacks of confusion on you will deal 1500-ish damage per ability you use. Do you fight, or do you try and run away and hope that the Mesmer doesn't apply more stacks or have a lot of condition duration? And as a reminder, the Mesmer is fully capable of attacking you even if you fight, meaning you will be taking that 1500 damage per ability use on top of whatever else they can throw at you. Which is the right answer? What I'm trying to say is, both are bad choices, they give the illusion of choice, which is a horrible mechanic. You either let them kill themselves, or not fight back and possibly get killed anyway.
I think that the "illusion of choice" is a fine mechanic. My experience with other games is that whenever you offer your opponent a choice of two things that are both good for you or bad for them, you're not going to get as much out of the deal as you hope. Yes, continuing to fight might just result in death but if it will result in holding a valuable position, buying time for allies, or killing the Mesmer, it might still be worth it. What makes it a worthwhile and interesting choice is that there probably IS a best choice for the player to make and skillful players will select that best choice more often than poor players. Confusion is a mechanic that could have a big payoff for the Mesmer but which, like other skills, is mitigated by the opponent's defenses - only in this case, it's not a character's trait or skill that mitigates it, but the opposing player's