Seeing that the Blaster Launcher is the single most powerful and expensive weapon, I don't want to waste it for trivial cases when a heavy plasma bolt or two would be able to do its job and I also don't like putting my troops into danger.
The possible use cases I know of so far:
Against single enemies: If there is a line of sight then I can almost always position one or more troops to have a clear line of fire and neutralize the target using plasma weaponry.
Against groups of enemies: If there is a fallen enemy (or friend) nearby then its equipment probably will get destroyed by the blast, and I have yet to stumble upon a bunched-together group of aliens.
To crack open UFO hulls: After clearing an enormous zone free of friendlies and loot, opening a single spot doesn't seem to offer that much of an advantage, especially when considering that aliens can also use it to fire upon my troops from the cover of the remaining hull. Opening the top of an UFO and dumping in grenades seem to be a better use case but this method still destroys valuable loot and UFO parts.
To level farmhouses which might hide aliens: For this purpose it seems a bit too expensive, especially when compared to using plasma tanks to punch enough holes in walls to see inside from a safe distance.
To clear larger UFOs from the inside: Using such a powerful explosive in confined spaces seem to guarantee the destruction of loot, lootable UFO parts and the injury or death of friendlies. When accounting for missed shots and accidental reaction fires the situation is even worse.
I'm quite a beginner though (on my first playthrough) so I might miss some things that are more significant on harder difficulties, that's why I'm asking the experts and veterans here :)
My current strategy has a Commander with Blaster Launcher sitting on top of the Avenger in case he is needed, while snipers with Heavy Plasmas cover scouts equipped with Plasma Rifles. Using this strategy I hardly lose any troops and have yet to find a situation where I need to fire a Blaster Bomb. Am I doing something wrong or is this the expected way of fighting?