The Choice Scarf isn't the best item, but it is very, very useful.
The reason why is so useful is that you can stick it onto a Pokemon and suddenly it will help to check or counter so many other Pokemon. If your team is having trouble with a certain offensive Pokemon that is outspeeding and doing heavy damage to all yours, then giving one of your Pokemon a choice scarf will often allow it to outspeed and OHKO that threat. For example, Tornadus-T outspeeds most Pokemon in the game, but if you were then to stick a Scarf on, say, your Terrakion, Terrakion would then be able to oustpeed and OHKO it. Like BH said, it's very useful for offensive teams as they don't have to look for slow, bulky Pokemon to wall the fast, offensive Pokemon they're having trouble with, they can give something a Scarf to outspeed it. Finally, a lot of people include a Scarf User to be a good revenge killer, to outspeed and OHKO fast Pokemon, or ones that have set up or even, if they're powerful enough, to 'clean up' a weakened team.