Until several months ago, I used TCS2 on almost every car above N400-N500 range. I was able to make it well into A+ and achieve FIA S-ranking in both MFG and Nations Cups several times over in a less competitive NA region. I can honestly say that I've been in a ton of high-ranking lobbies where I'm pretty sure I was the only guy using TCS, and I'm not the fastest guy around, but I've beaten many a fast racer who are probably a little too proud of the fact they don't use TCS. I often wonder how many times people have watched replays to learn I'm using it, then got irked that they finished behind me...a lowly TCS pleb.
My point is that it's very possible to be faster than most people who play the game while still using TCS, as better times are typically derived from taking the right lines and braking later/trailbraking into corners and hitting apexes rather than throttle control. There's a certain way you need to drive to get the most out of it, and that driving style is not all that different from driving without TCS, just try to not let your tires slip and slide too much and keep your wheels relatively straight when you mash that throttle. TCS2 has saved me more times than I can count in high-powered cars, as it's basically impossible to spin due to being too generous with the throttle while using TCS2.
The only problem is that now that I'm much better than I used to be when I started playing the game, I have become accustomed to having a heavy right foot without many consequences. So more recently, when I started making the switch to no TCS in the cars that I can handle (Gr.3 and below) my learning curve is a little slower because I have that bad habit, especially in the heat of battle. But I'm adjusting and getting better all the time.
What I've found is that the higher the power of your car is, the less time you tend to lose using TCS. This is not true for all high-powered cars, but in Gr.1 cars, the Redbulls, the F1 car and a few other monsters, TCS is actually better at modulating the throttle than most people are, aliens excluded from that claim. Both occasions that I've posted a top 10 time, it's been in the Red Bull Standard and a Gr.1 car using TCS2 and auto transmission. I could literally send it through some corners and just plant my foot on exit and I would get better exits than those who had to be more conservative with the throttle, simply because TCS was keeping the throttle input right at the maximum limit without spinning, whereas others seemed to struggle to find that limit so they either spun their tires and lost a bit of control over the car, losing time, or they didn't apply enough throttle and were simply slower on exits.
Once you've figured out how to drive with TCS, you actually lose most of your time in the gear shifts on straights. It's not much, but you'll see other cars pull ahead just a little bit each gear. There are some tracks where I only use it for 1 or 2 corners and only in race, as sort of an insurace policy. I can't tell you how many times I've beaten guys faster than me simply because they spun in the heat of the moment and I didn't. Losing tenths per lap due to TCS and keeping it on track is much better than being faster but spinning out once per race and losing 10s.
Also, having slightly better tyres toward the end of a tyre-saving race, can be invaluable in a long one, especially in FF or AWD cars, which don't lose too much of their rocket speed/acceleration using TCS1. One of the fastest guys in the UK, Tidgney, sometimes uses TCS1 on FF cars for FIA races, which he seems to favor.
Part of what I'm getting at is that there are a lot of people in this game, even very fast people, who probably should be using TCS because they seem to be barely in control of their car many times. I think ego or machismo or whatever you want to call it plays a part in that. You can tell by how some people respond when discussing TCS that it's not a logical conclusion but an emotional one to not use it. I also agree that people who are many seconds off the pace should probably turn it on and see what it can do for them. I bet some of those people would be faster, even if it did bruise their ego a little.
Now I almost always qualify without TCS, and I always race without it in Gr.4 and below and am slowing transitioning to TCS0 in Gr.3 cars. I just did my first FIA race in a Gr.3 car without TCS and did relatively well finishing P5 in a half A+ half A lobby, but it was in the Atenza and on medium tyres, making it much easier to handle. Certain Gr.3 cars on hard tyres will still require me to use it (GTR, Supra, RCF to name a few) and I'm perfectly fine with that. Still getting wins and putting up times in the top 100 or better most of the time.
Thus concludes my TCS novel.