they are probably one of the worst units in the game.
Their only upside is that they are cheap, they only cost 25 hammers, so it only takes 75 hammers to make a fleet, wheras battleships cost 80 and cruisers cost 40.
Hardly anyone builds them and I've never seen them as effective online. but if you are low on production or gold and are getting harrassed on the seas, it's a cheap way to attack. It's not like spending all that gold/hammers on a fleet and then getting it sunk. You can get two sub fleets in the same amount of time and have a more likely shot at sinking a ship.
But I never go this route. they should have done it a little different, and given it a lot more movement.