As a person who used demonesses on a regular basis, I have to say that they are an extremely useful units. ckdamascus has clearly made a very offensive lineup (adding both demons and executioners in it) and the demonesses with their good initiative fit in perfectly.
Demonesses have 3 distinct qualities - first, they can teleport a stone-skinned Executioners stack directly into the enemy lines, swapping it with a low-defense enemy stack that will easily be butchered by the demons in his own lineup. Second, they can covert a weakened stack to their control for a few turns. Third, they make decent off-tanks (secondary tanks) who take less hits when attacking thanks to their special abilities.
Demonesses are very much a worthwhile addition to any army that tolerates (race relations are a very important concept in all KB games) them without a significant morale penalty. The Girl Power army comes to mind first (Lake Faerie, Tree Faerie, Dryad, Demoness + 1 stack that can resurrect) with a Rune Mage/Demonologist is very solid for the better part of the game, as almost all of them have no retaliation ability and if you add stone skin and target to that combo, you get some rather interesting and easy to win battles
SPOILER: Stone skin the rune magi, have the demonesses swap them for a low-defense stack, have the fairies and dryads quickly kill the swapped stack - can be done even in a single round - cast target on the rune magi and simply move the girls to finish off the enemy stacks while they hack at the well protected Rune Magi.