I did some testing on this, but it doesn't seem that useful...
I thought of two possible uses for this: using it defensively, and using it to make someone fall of the edge of a stage, asleep.
Now, defensively it doesn't do much. Even if you start getting good at timing it, there is still about a 50% chance sing won't hit someone slidedashing towards you. If you miss, then you are left wide open. Even if you do hit them they end up far away, so it becomes hard to counter attack.
So, next I tested some of the properties of the sleep effect. Firstly, if a sleeping character is on a platform and if breaks/disappears, they will instantly wake up. Even if you use an attack like Water gun that only pushes, they will just wake up when they are off the stage. When dash canceling, you can't fall off the ledge; you just stop at the edge, meaning the opponent will not fall off the edge. It can be used on walk-off stages to kill, but no walkoff stage is considered a CP stage, so ya.
So all-in-all, I can't see a use for it.