From: Glasgow, Scotland
The Lily dive-bomber is effective for several reasons. I've had decent results with them.
1. The range. You don't get many dive-bombers as Japan that can reach out to 11 hexes. The IJN is stuck with the short legs of the Val and early Judy models until the late-war dive bombers arrive.
2. It's an IJA plane, so you'll have plenty of pilots and plenty of air groups to train NavB pilots on.
3. It's the best (and more or less only) anti-shipping bomber for the IJA until the Peggy T comes along. It's a nice stop-gap to give the IJA some anti-shipping capacity.
4. It's an IJA plane, so Lily air-groups can take some strain off IJN bombers, and the IJA is suited to the high attrition that your dive-bomber pilots will suffer.
However, you need to temper your expectations. The 100kg bombs might tear the decks up on a carrier, but they'll struggle to sink one, and your bombs won't do much damage against anything heavier than a crusier. Even Allied destroyers can take a few 100kg bombs and still make it to port.
At the end of the day, it has a fairly niche role in attacking "soft" shipping targets (it can do ground attacks, but the regular level bombers are far better). If you use it in this role, it performs very well. If you decide to send Lily's out to sink some battleships, crusiers or carriers, you might be disapointed.
For me, the main value of the Lily is that it's an IJA airframe and it has some decent range.
I am only considering it for ASW, not even in anti-shipping role.
If it cant do that better than a Sally then there is no need for the Lily.
That is a mistake, on both counts. There are far better airframes for ASW than the Lily. The early model of the Helen, for example, has a much better bombload and superior range to the Lily dive bomber, so is far better suited to ASW work than the Lily DB (and you'll be building them anyways for the regular bomber groups).
The fact that the Lily DB version can dive bomb has no impact on ASW attacks (AFAIK, unless Alfred swings in with a post to some forgotten dev comment somewhere).
The Lily's real value is that it gives you an IJA airframe that can put bombs accurately onto small warships, allowing you to use IJN DB groups for training or use elsewhere.