I got a chance to try out Mewtwo yesterday, and I have to say that Confusion was EXTREMELY useful in dealing with opposing projectiles, especially from opposing Links and Falcos.
On large stages like FD and Dreamland, against a campy Falco, Confusion was quite literally the only thing that made the MU bearable.
And it definitely is great for the offensive game, though I was disappointed that I couldn't combo Confusion -> SH Disable. Disable looks like it's going to be a good gimping move when you hit them while they're in the air