Sure, it can be useful in certain situations, but I've never had problems killing opponents during war day using just the stock cloak. You'll be surprised at how oblivious most players are to a spy decloaking behind them, and there is enough time in a fully filled stock watch to move quite a distance on the map. Aside from your own gameplay, the only times I've ever seen the Cloak and Dagger used is to simply hide in some random corner of the map.
The players can be reported for delaying, but why keep an item that nearly all players who use it don't use for its intended purpose? It's like having a tool in a toolbox that nobody ever uses for its intended function. Instead of reporting them for misusing the tool, a simpler option would be to remove it altogether.