I'm running under the assumption that the death of said capitol ends in the death of the fleet it was with
Not at all; it's entirely possible to lose a capital ship but win the battle, and even if you do lose you should have gotten a fair chunk of your remaining forces out alive by retreating. If you're still have a fighting chance, it's unlikely you were completely wiped out.
It's not like the ability is used ridiculously often.
That's because you need a level 6 Progen and another high level capital ship for this ability to have any application. Since most games end before you can get multiple high level capital ships, this isn't exactly a commonplace ability. As well, if a player managed to keep multiple capital ships alive long enough for them to actually reach these levels, it's unlikely he'll just allow them to die. Moreover, if it's the Progen that dies you're out of luck.
Of course, if the game runs late, fleets start to balloon and high level capital ships (and deaths thereof) are quite frequent. Heck, I had a massive illuminator swarm battle just last week. The enemy began to focus fire on my capital ship when it was level 1... and it died as a level 5. I replaced it with another Progen, and within ten minutes that one was level 6, and I began to build more caps which I intended to promote via ressurrection (enemy called the game as I was doing this, since I'd just turned that entire front around).
So, it's a highly specific skill that's often useless. However, when it is useful, this is easily one of the most powerful skills in the game.