I think they serve nicely as fodder or some kind of meatshield to hold up the line and allow the Dwarves to do the real damage. However, you can make them combat effective via their leader's buffs (Bard and Brand). Also, in some cases I use upgraded Men of Dale Swordsmen with their formation to harass because they can serve as a soft alternative to light cavalry, although that is rarely needed when I actually field them. The Black Arrows can be quite useful as well.
Usuallly the Marketplace or Laketown is just a nice, cheaper, resource-generating outpost alternative, that self-repairs too and denies the outpost to your opponent.