I have 20 students, and for those age 16 or younger, learning sight reading skills in standard notation is mandatory. However, when my students want to play something that is far beyond their ability to sight read, TAB is a great tool. It helps them with position and fingering. You can even notate note value using TAB, denoting half, quarter, eighth, sixteenth notes. etc. It forces them to listen to the song carefully and develop their ear. No, TAB is not nearly as complete as standard notation, but it does help the beginning reader play a more complex piece that would otherwise be well within their ability, develop their ear and boost their confidence, self-esteem, and intuitive knowledge of the fingerboard, and that is the usefulness of TAB.
+1
Tbh in my limited experience with tab apart from the dreadful inaccuracy available, I was concerned that there wasn't any rhythmic denomination there. As you stated, that is the way forward for tab as a tool I feel too, give it rhythmic value. It has it's uses, especially for hand positions, which makes a big difference to the feel/sound of lines/inflections.
For younger student's, given that it has rhythmic values, it may be a good intro for notation for some.