I find that Burst makes the Hellstriker Allegretto's second strongest weapon in the entire game (the strongest one being the final weapon that he gets in the Mysterious Unison). I haven't had too much trouble with the defense penalty (I didn't even realize it was there until I saw it in a walkthrough). Then again, I haven't played Encore yet, so....
Better off using the items to raise Attack if you need it than using Burst in Encore. Enemies hit you for 1.5x damage in Encore, and coupled with Burst's Defense -50% penalty, it just isn't worth it unless you get perfect blocks consistently.
Burst on Encore is actually quite helpful; you finish off enemies so fast you'd wonder if you were even on Encore mode. They kill you in a few hits if you don't guard even without Burst, so I don't see why you wouldn't use it. It isn't like you can't use one of your 25 Angel Trumpets to revive someone if you make a mistake anyway.
http://www.youtube.com/profile?user=ZeromusX "When there's a save point around, ****'s going down." ~ IrrelevantAlex