Yes, it is being used and the alt attribute should be used by web page designers and authors.
It should be put in with the end user in mind, accurately describing the topical relevancy of the image it's being put in for. Keywords and/or keyword phrases are fine. Whatever is legitimately for the benefit of users who may not be using images for browsing (like the visuallyh impaired) can be expected to pass scrutiny if hand examined, which imho is the ultimate test of viability.
That doesn't mean putting whole paragraphs of text into alt text when a page is all images is OK.