I'm not really seeing its value. It seems like an excuse to add self-promotion and outgoing links to many pages on this wiki.
Topic on Template talk:Used by
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Without comment on the template's usefulness/appropriateness, all external links get the rel="nofollow"
attribute, which prevents them from contributing to the linked sites' SEO, which partially addresses the self-promotion concern.
I'm biased, because I created it, but I think it's extremely useful - in the absence of a rating system within mediawiki.org, I dare say the "Used by" template is the single best indicator of an extension or skin's popularity, and thus to some extent its usefulness, within the non-Wikimedia MediaWiki world. For example, analysis of calls to "Used by" shows that EmbedVideo and CodeMirror are currently the two most widely-included extensions that are not bundled in with MediaWiki - which in turn is a signal to any new administrator that they should consider using them. (And perhaps even a signal to MediaWiki developers that they should consider bundling these two.)
Also, I think the "self-promotion" is useful, for anyone looking for hosting or a MediaWiki software bundle.
You make some good points. Who knew EmbedVideo was so popular?
Yeah, I actually didn't know that either, before this..