Best use of Paeon is big pulls of mobs when you have a WAR, DRG, MNK, NIN, or other BRD spamming the hell out of AoE. People will argue that it's less effective for the dps to do that but some times it makes the fight a bit easier overall. Hitting 5-10 mobs for smaller damage can be better than 1 big hit on a single target. It's all about overall damage to the group.
If you taking a hit to your dps lets the entire rest of the group pound out more damage it evens out (or increases) and makes things smoother.