A one-power creature with deathtouch is a roadblock no one wants to run into. That is the whole point. The rules language is about lethal damage, but the table effect is psychological: an opponent's 5/5 cannot attack into your 1/1 without losing the 5/5, which means it often doesn't attack at all, or it attacks somewhere else, or it has to be spent on removal you would rather they spend on something bigger. Deathtouch turns the smallest legal body into a tax on combat.
The keyword lives most naturally on cheap creatures and on activated abilities that ping. On a one-drop it is a defensive anchor that trades up the curve all game; on a pinger it is single-target removal on a stick. Paired with first strike or reach, it covers two axes at once: a deathtouch reach creature shuts down fliers, a deathtouch first striker erases attackers before they connect. Paired with trample on the attacker's side, one point of assigned damage clears the blocker and the rest carries through, which is why a deathtouch-trample finisher is so hard to chump.
Where it underperforms is anywhere combat is not the question. Deathtouch does nothing to planeswalkers, nothing to life totals beyond the one damage it deals, and nothing against a sweeper. It punishes opponents who attack and block; against a deck that does neither, a deathtoucher is a 1/1 for one with a long résumé.