engineering was first sold as customization and "ship variation" and yes, it turned out to be several levels of power creep fueling the skinner box (and no, at no point mods were side-grades. you wish. the boosts started out fairly high already (you know, in honor to good old skinner) and the downsides were usually negligible.
The truth is in the middle. Some engineer blueprints at the start were along the line of "specialisation" and "finetuning". Some required the user to know what they were doing.
A classic example are the overcharged powerplants of old times: you upgraded only as far as you needed. The price of additional heat was significant, just going G5 and calling it a day was a bad idea. Especially if the rest of your setup also contributed to heat buildup. Many of my ships ran on a G1 or G2 overcharged power plant. Which of course, due to those materials being plenty, were rolled many times to get the optimal result.
By now that's nothing i really care about. Heat became much more manageable. (E.g. due to the -40% heat for railguns, as soon as you add a special effect and due to heat sinks being easily and cheaply replaced by synthesis, so you don't need to hold back and strategize on them as much any more as in old times. )
That being said, your observation is true for many blueprints: they were a direct and often very potent upgrade, right from day one. Many had downsides which were very easy to mitigate, up to some degree where they didn't matter any more at all.
So while examples to "prove" either side can be found, the end effect was what you describe: massive power creep right from the start. And while it gave some bored people something to do for a while, there's no real benefit for the game. It devalued plenty of content. It eliminated many formerly frequently uses builds from the game, due to engineering not supporting them and they thus becoming extremely weak in comparison. Even a number of ships, which formerly had a number of active users, were moved back to stepping stone status, as they could not compete any more. For the mere reason that you could not pack as many engineered items into them as into the alternatives.
If somebody is curious, just look up old time pre-engineer threads, which ships and builds people used. There are so many wild things in there, which had plenty of users and supporters. All of that is gone by now. These ships, formerly seen as good choices, by now are mere stepping stones. Would FD remove them from the games shipyard, people might not even notice it. When looking at the complete picture, engineers removed more from the active game than it added.