The saving grace about the flamer is its ability to lay down several fire traps in a narrow corridor and let Necromorphs suck up fire damage until they explode. The fuel is cheap but the weapon is limited to an atmosphere - if you take Isaac out into a vacuum, the flamethrower - and the ammunition it uses - becomes the largest piece of un-used crap in your inventory. In Deadspace, the flamer is a makeshift weapon used for welding. In a spaceship, a flamethrower is effectively a suffocation weapon (like poison gas) since it can burn up more oxygen than what O 2 cyclers or plants can replenish.
IGN would like to take time out now to remind the sole reason Ellen Ripley could use a flamethrower in Alien 2 (James Cameron's Aliens) is because she was on a planet. Note if you put weapons into storage and end a chapter, it will only have 1 unit of ammunition when you pull it out of storage in the next chapter.