You are correct, but here's the thing, unit for unit Fission is less powerful, true. But Fusion requires a constant supply of fuel and anti-matter is VERY expensive to produce, especially when compared to other forms of energy. Crystal based power requires fresh crystals in constant supply and anything else is either too expensive or requires constant resupply.
Fission does require a fuel supply in the form of radioactive materials, namely uranium from what is currently popular IRL. That said, the fuel rods last for long periods of time, roughly two years IRL, though with Star Wars tech this could easily be doubled or even tripled. This means that fuel is cheaper to afford and replace which means that the power is cheaper and easier to manage. Also, nuclear reactors, when compared to sci-fi fusion or anti-matter, are far cheaper to maintain and build. On top of that, in the event of a catastrophic event, the reactors don't cause massive explosions. Yes, there is radiation and that can be devestating (Three Mile Island and Chernobyl for RL examples) but with Star Wars tech, such an event could easily be avoided or the aftermath easily dealt with.
With fission based engines, the principle is the same with fission based reactors. Fuel rods would last for years before requiring replacement rods. This means that so long as there are enough supplies on board the ship, or an easy supply line to access, the ship can effectively last two years in the field before requiring refueling. With Star Wars tech, that could easily double or triple allowing ships to operate for four to six years at a time, provided food and water isn't an issue. On top of that, damage to the reactor in combat or through accident wouldn't cause the reactor to arbitrarily explode and destroy the ship. Yes, it would cause radiation to flood the nearby compartments, but with proper damage control, system redundancy, and safety equipment that potential hazard can be minimized or removed outright.
The only problem with fission is that the power output is lower than competing systems. This can be rectified by larger reactors which would be unfeasible in real life. That said, this is Star Wars and the tech is far more advanced. This means that, theoretically, fission engines and reactors can be built much smaller and, in turn, a reactor big enough to match output with a Fusion or better reactor wouldn't be unrealistic.
As for weaponized fission, you're right. Other mediums are far more devastating. That said, fission devices are still much cheaper and easier to produce, even when scaled up to compete with fusion or anti-matter devices. This means that fission weapons maintain lethality and effectiveness. It also means that, weapon for weapon, more can be produced when compared to Fusion or Anti-matter devices. Now, again, there's still radiation after the explosion, but the weapons can be altered to minimize that radioactive fallout and, again, with Star Wars tech levels, that fallout would be fairly easy to clean up afterward.
So, in essence, you're both correct and incorrect. Fission in Star Wars is incredibly dated, but far from obsolete as it still maintains usefulness and a cheaper alternative to power when properly used.
