The problem with Sten is that at best, he's adequate. His physical attack is nowhere near as good as Katt, Ryu, Rand and even Bow. His magic is also not nearly as good without the Shaman system. You are just better off with using Nina and Dias for good magic damage. His other stats are also only adequate as best.

Katt is pretty much a high risk/high reward type character and I feel there are enough equipment opportunities (as well as just some normal levels) that make Katt's handicapps not nearly as bad. Her high agility stat makes sure she dodges lots of hits and with proper equipment, she can easily take a few blows before going down. With her high attack stat, she can feel enemies faster and reduce the risk of taking damage.

I just feel her advantages outweigh her disadvantages and she's not anywhere close to being considered part of a bad party set-up.