My big break-out season in 2008-2009, when I earned my Cat 2 points, 90% of my threshold work was SST as described in the previous paragraph. My threshold power jumped from 310W to 360W (well, MAP was at 500W anyway -- FTP numbers are elusive for me) as my weight dropped from 183 lbs to 169 lbs (dieting hard). That was a really good year. It can be effective.
Also, speaking with a local coach who recently won the US elite crit championships, SST is exactly what he does in a bunch of his training races. He just goes to the front and drags the pack along until someone comes around him, then he recovers for a bit and goes back to the front when the pace lets up slightly. So he's rarely doing any real hard riding, but never riding easy, and not riding steady. He's also been the TX state TT champ a couple times.