I do like the idea of an offensive flare. I think the best application would be to use them in conjunction with armor stripper and focus on keeping their hull down / on fire.
Its hard for me to trust a flare into the balloon when chem spray is in the hands of a decent engineer.
Probably have to ram for the kills or throw a flak on a top wing.
I find that its best use in general is on guns and engines. Especially on galleons and junkers, where chem cycles downstairs tend to be lacking. It's all about exploiting the weakness of a ship's fire control with absolutely no guesswork involved. If someone forgets to cycle a gun with only chem spray on board, it's actually worse for that ship than just a gun break, because you're forced to chem it 3 times before it's no longer overheated, OR wait for it to break and then rebuild it. That extra wait time can be devastating in certain types of engagements. Or it draws an engineer to a place he doesn't want to be when that focus fire comes for his ship.
Another practical use would be ships that rely on carronades. In pubs, side flares on a blenderfish or a carrot are especially nasty, as there is no right answer to how to repair the balloon, other than shooting out the carronade and chemming the balloon.
As for the competition in the video itself, it was just an impromptu thing that simply happened with no real practical application.
