There are several times to use Blood Weapon. If you're main tanking, I'll use it if I'm running out of MP and there's 1-2 mobs left for a quick refresh. You can also pop Shadowskin right before dropping grit -- You're putting an active 20% mitigation buff and dropping a passive 20% mitigation buff, so you can use the 20 seconds to Blood Weapon too.

In raid situations, if you're the off-tank you can (and should) use Blood Weapon whenever you're planning on going balls out DPS.