You want me to be honest?
Eh, I'll be honest anyway.
The way this game is designed, it appears blocking has become more of a liability than a benefit. Why do I say this? I'll provide a list:
- chip damage.
- meter-building.
- combo possibility off of either a low hit or an overhead.
- throws.
- cross-ups.
For the first item, if you have plenty of health to hold on to, it isn't much of an issue. But if you're running very low, you're likely to panic and start looking for a way out of the pressure. This oftens leads to you losing, especially if you're facing a smart player who knows his shit with pressure tactics.
The Super Meter is always a vital part of strategy, and an attacker can get lots of it just by making his opponent nervous enough to block so that he can repeatedly pressure you with a mixture of low pokes and high hits. This also awards him the chance to inflict chip damage, which makes this two benefits in one for him. For you, the defender, it makes your situation look even worse.
Not all characters have the ability to combo off a low hit or an overhead, but trust me...they're out there, being used by even tournament-level players. If they manage their mix-ups in a godly way, you'll start to feel as if your block button has been rendered useless and instead you'll be frantically low-poking and/or jumping just to get away.
Since you cannot be holding the block button while trying to escape a throw, this will definitely kill your defense. If you block a jump-punch (or cross-up punch), the throw is guaranteed, I believe. This could trick you into not blocking when they come in on you with a jump-punch, but if you misinterpret their intentions...get ready to eat a full combo or get ensnared into a vortex of pressure.
I already mentioned cross-ups. You sometimes try to uppercut them, low-poke them, or use a special move depending on the character to counter their jump, as it is universally an unsafe tactic, but if you're not quick enough to react, one of these three outcomes will occur: you'll get hit while on the ground and be combo'd into submission, get knocked out of the sky by the punch...or, depending on the character, you might eat an anti-air combo off a cross-up (examples of this include Kitana and Mileena.). Blocking is little better, as they can start chipping away at you or throw you.
Now, this is not to say that blocking is not a vital part of your game. It is all a matter of being patient and knowing when the time to counter is right. But I feel that this game tests you more for your ability to react appropriately. If you just hesitate or do nothing, you give your opponent control of the fight. You do not want that at all.
So the best I can say...keep that block button handy...but train your reflexes enough so that you'll recognize a situation when it comes up in your face and know what to do to overcome it.