I just completed a play-through with an explosives build. My Tags were: 100 explosives, 100 sneak, 100 medicine (for when i get too close

) You still get the sneak attack bonus from explosives, and when you get a whole bunch of enemies bunched up you can do massive amounts of limb damage (or kill them all outright). Also once I got my hands on a missile launcher and 40mm grenade launcher I was able to take out groups of enemies so much faster. The only downside is that you really do need to watch your ammo, as you can run out REALLY fast, so working up Guns, EW, or melee a little bit is pretty necessary.
My one real complaint would be the lack of cherry bombs in the game. During my entire play-through I didn't find enough cherry bombs to make crafting Bottlecap mines worthwhile, which was a real downer because they were my bread and butter in FO3 when dealing with Super Mutant Masters, and Deathclaws (another reason to keep Guns/EW/Melee up). I did start to use explosives a little less towards the end game, as I discovered the awesome power of the Anti-material rifle, but I did still use the launchers whenever I could get the drop on enemies clustered up.
There weren't all that many situations when the explosives skill opened up dialogue options - its probably on par with Guns, or any other combat skill. Its really better to look at the skill as its own combat option, as the perks you get for it (10x better then FO3) really compliment going for an all out explosives build. You can increase throwing range for the 'nades, increase area of effect of all expl. dmg, and increase dmg up to 60%. After getting all those perks , 1 frag grenade, or 40mm grenade did about 134 dmg, then factor in the pump-action you get with the grenade launcher and you'll make mince meat out of any group of enemies in no time.
So as far as I'm concerned, an all-in explosives build can work really well if you use the skill in the most optimal way - which is to hit as many guys with 1 blast, and having the various modifiers can mean the difference between a lot of limping angry guys w/ guns, or just a lot of corpses.