No doubt, lots of flakes and dreamers on CL. You have to sift through a lot of crap.
Still, I have had successes using it. You just have to be patient and keep looking till the right group comes up. After all, if YOU are worth having in a band and you're resorting to CL, there must be OTHER people worth playing with who are in the same boat, right?
I'll run through some of my experiences -
About 5 or 6 years ago, when I was a new player, I posted an ad looking for jam partners. Got picked up pretty rapidly by a guitarist and drummer, soon after added a rhythm guitar/singer. Jammed with them for a year, broke up because the drummer and I wanted to gig and the singer couldn't learn enough music. The drummer and I briefly formed a power trio with another guitarist but then the drummer left for another project and it broke up. He was good and if he were free I'd play with him again in a heartbeat.
There was a keys player/singer who also joined that group briefly. After it broke up, I got in touch with him to form a new group. We advertised on CL for other members (drummer, guitarist), but got a lot of mediocrities, no one who was up to his standards (he had studied at Berklee for a while). Eventually we gave up.
Linked up with a singer and guitarist who wanted to form a pop/punk cover band to fund their metal originals (

). Needed a drummer, and I got my friend from group #1 to try out. Left them when they couldn't tell the difference between his excellent drumming and a kid who bashed the skins with no sense of timing.
Played with a funk/rock group for a while. Beginner drummer and a singer/guitarist who had never been out of the bedroom before, plus an additional guitarist. Seemed promising, but proved to be a train wreck when we tried to play an open mic and they clearly had no idea what had gone wrong or how to fix it. Wound up leaving, but the additional guitarist was quite good and he and I would get together to jam from time to time after that.
Answered an ad for a cover band that needed a bassist. Drummer, guitarist, chick singer; they all knew their business and had minimal drama. That became my first band to play actual paying gigs. Had a great time for about a year and a half, then the guitarist stopped going to his AA meetings and it started to unravel. In rapid succession, he and I had a big fight, I moved an hour away (near enough to keep playing with them if things were going well, far enough to look for something different when they weren't), and then he died in a motorcycle accident and that was the end of that.
In the new location, found an oldies band. Good guys, good players, but they just didn't seem to be able to get gigs. I was really gig-hungry by then after having a taste of it, and eventually moved on.
Finally found another cover band, rather like the one with the alcoholic guitarist only without the alcoholic guitarist. Been playing with them ever since.
There are probably a couple of others I haven't mentioned - auditions I've gone on with groups that were just flaky or incompetent, ads I've answered that never even got to the point of meeting. Not counting those, that's about seven different projects I've been involved with that either began with a CL ad or that used CL to try to complete a roster. Of the seven, two that I would consider successes, at least for a time. Basically, CL can pay off if you can be patient and weed through the flakes until a good one comes along. But it takes time.