There are plenty of times when the enemy has managed to capture the wreck field and I'm like 'Ok, just need to build up enough of a force to retake it before he gets a big fleet of cons there or places down his nanos in the wrecks.' Suddenly, puppies. Puppies everywhere.
They're also good early at preventing naked expansion on really large maps where pyros are a bit too expensive to get good coverage (Their original intention). They will also make cost if the enemy tries to defend with bandits or glaives (but not fleas or darts. :/).
Puppies have a range of problems.
1. Reclaim maps. Any maps with a significant amount of rocks are totally ruined by puppies. This is their #1 problem. Honestly these maps have always been about spamming cons and sucking the metal fast, but at least every factory and unit is on even grounds there.
2. Always making cost vs glaive and never making cost vs flea is kinda clunky but I guess that's what you get for a single-target suicide unit (holdfire works vs cloggers, but fleas WILL kill the puppies).
3. They're actually pretty bad at taking wrecks in hostile territory because they die so fast. But I guess this just makes them balanced.
4. They're AWFUL when used with the firewalker (In the same factory).
5. A puppy with 90% reclaimed metal will suicide itself and do the same damage as one with 0%, it takes insane micro to select out the almost-full puppies.
Balance-wise I think they're pretty good, especially the way that retreating riot units and static defense just totally destroy them.
Oh, and don't forget that they work against air.