Like every metric out there, it's how you use it.
If you use it as the base for selling domains at the price the appraisal shows then you'll end up not selling anything (like it was mentioned)
If you use it as a statistics tool though then things change; in reality you have access to the biggest registrar's sales database along with examples (on the right side) of why the appraisal calculates the domain at that price.
The algorithm is what it is, it will show you high appraisals if similar domains have sold within GoDaddy (for whatever reason) and low prices if they haven't.
With that in mind, it's up to you how you translate what you see.
Personally, I find it very useful.