I've never really had a problem with Cait Sith and oddly I can't fathom how people feel he's out of place in VII's world. He's actually a decent fighter, his ultimate weapon makes him a total powerhouse since its exactly like the Ultima Weapon/Conformer and his Slots have that wonderful exemption rule that allows him to one shot Ruby and Emerald WEAPON.

I feel he shows a more playful side to Reeve and to the game as a whole, there are a lot of places in the plot that feel a bit off when you stop to think about them and while Cait might be one of them, I never felt he was a game breaker about it. My own personal issues with the plot come from the second disc anyway.