It does need looking at, I haven't yet researched far enough to unlock Terror Stars yet but reading these comments reminds me of a GalCiv 1 game I played a while back.
Without boring you with the details, it was a medium map, 5 opponents I was a joint super-power on very good terms with the Torians who were the other super-power. All of a sudden the Torians went all "Drengin" and in the space of a few turns, declared war and hoovered up everyone else but me.
With the feeling I would be next, I researched like a b***h all the Terror Star tech and cobbled together two just as for no reason, the Torians decided they didn't like me anymore....
Cuting this story short I managed to use my Terror stars to explode their main production systems to disable their ship building ability, and buy time to pump out a few counter attack ships and transports.
By effectively castrating them militerally by use of Terror-Star was the ONLY way I not only survived but reduced their entire Empire down to one rump world which I allowed them to exist on.

I don't get the feeling that scenario could be repeated if the TS doesn't have many HP and certainly no weapons or defences, as the TS on the 1st GalCiv took a a hell of a beating infact both were eventually destroyed, but not before bleeding the Torian battle fleets beforehand.