Frankly, I think that auto-battle is just a symptom of the greater problem, which would be the whole combat system. I'm not a fan of it, because if there's an in-game feature that knows what I want it to do MOST of the time, then really, the game just needs me to press A for it. The highlight of my own gameplay experience was when I initiated combat, then went to the kitchen for a drink, taking the controller with me and pressing A every so often. When I returned to the game, I had gotten a 5-star rating out of it.
I've seen at several points in this thread that you don't HAVE to use it. Firstly, that is technically incorrect, unless you've found a way to take over the control of the rest of your party, and secondly if I'm given the option to ride a bike or drive to work, most of the time I'm going to choose to drive. There are times when I don't like the options that auto-battle is giving me and I have to pick them out myself, but if my character is doing anything besides the "commando" role, my ATB gauge has already been full for a couple seconds, and I'm wasting time while the enemy isn't waiting to beat on me, and the battle-timer on the almost completely useless rating system is ticking.