I play heals and the first time I really noticed Sleep being so helpful was in my first run of Haukke Manor where the BLM slept all of the non targeted mobs and it was such a breeze to heal XD It's a whole lot easier too when you get the trait that allows you to sleep multiple mobs at once (I forget if it was Level 26 or Level 31, but I remember that I really wished it was a level sooner because it helped so much on the nearest class quest).

When I DPS I usually BLM though, so I look at the party make up, if the tank is a PLD and the other DPS are single target Melees, I'll sleep. WAR have more AoE damage moves, SMN tend to spread the DoTs around, BRDs have a lot of AoE damage, as do NIN, DRG and MNK not so much. So I sleep and single target when that's the make up of the group... You probably get the most flak from speed runners that were expecting you to just AoE down a huge pull. So if they're doing big pulls, just AoE and they'll be happy. When you need to swap to single target to regain mana, go ahead and sleep in the short down time.