The auto-kiting can be useful, but it has also hurt me. The thing is that frequently, the stuff you want to "kite" with are your fragile artillery. When you are roaming around the the planet in a non "blob-like" way to target various things, then this works great. However, when you are blobbing around a specific area, particularly around a wormhole, the artillery starts running away from the safety of your blob, thus not only getting picked off earlier, but frequently getting further away from where they can retreat (the wormhole).
So basically, you do not always want it on. The most common case in my experience is that you do not want auto-kiting when moving your units around as a big blob. Maybe have a unit ignore auto-kiting if they are group moving or "group idling", (not group attack-move or group FRD though) or if they are in a "sticky formation" (which would include all sticky versions of all of the move modes, or even "sticky formation" idling), as these are the two most common ways to force a bunch of units to act like a blob.
Also, I thumbs up the suggestion for FF bearing units to always ignore kiting.