Yeah, that's how I've been using it this whole time but, unfortunately, the bat isn't one of those smash attacks where it has to wind up before it stops and charges. Because of this, even after you charge it, letting go isn't a lightning quick release, but instead still has a .5 second delay. Oh well, the charging is nice.
Some other suggestions would be a D-Throw into the bat. This is because a lot of enemies will often try to get a quick retaliation in after they DI to the left or right, which usually leads to a well timed bat.
In fact, many times, an unsuspecting (little DI) opponent, can get D-Throwed by Ness, then if you PK Fire in the direction they flew, and land on the PK Fire which leads to a virtually 100% trap - Enough time to bat them in the face.