I saw a lot of posts on the beta forum complaining that the Necro's Death Shroud was under-powered and out of flavor. Ahem.
Death Shroud is amazing. First off, it's a defensive skill, not offensive. So stop trying to use it to deal 79432 AoE damage. Not what it's for. It's best use it to drop a ton of AoE marks on enemies or DoT, then hit DS, and they are all taking DoT while you are essentially untouchable. From here you can Life Siphon to do additional DoT on top of your Marks/Conditions. When you come out of DS, you are at full heath and most enemies are nearly dead. Then (if necessary) you redrop the Marks and fire off enough direct damage to kill multiple enemies. DS allows Necros to successfully tank when they pull aggro WAY better than most classes.
DS also gets a ton better as you level up. By level 20, DS was one of my best skills and I used it constantly. Using the method described above, I was able to tank lv 25-27 monsters at lv 20. For a light armor class, I'd say this is pretty freaking good.
It's in perfect flavor for the necro as well. You are avoiding death through this type of "shadow form". It also looks/sounds awesome, and as others on the beta forums mentioned, is great for escaping. There are also traits to speed boost while in DS, making it an incredible running combo.
DS is also a fantastic "blocking" tool for necros. If you watch the animations of enemies, the moment they attempt to spike you out, use DS, absorb all dmg into life force, then come right back out of it.
Like most things in GW2, it requires skill and planning to use effectively.