It has a couple problems. Ideally they should be used as an upgraded garrison. It's biggest benefit is that it uses the same techline as normal infantry so you dont have to waste research on the garrison line. Its base IC cost and officer cost are only slightly higher than normal garrisons. But there are 2 problems with this unit: the build time is far to long, 2.5x that of normal garrisons (and double that of normal infantry too), making the only slightly increased base price tag a whole lot more. Second, it has no suppression values- which doesn't quite make sense since the national guard tends to be called up in cases of emergencies to assist the population and keep them calm. If its build time was reduced to just slightly longer than normal garrisons and it was given a suppression value, I'd use them over normal garrisons everytime because of the huge research savings. Looking at it im almost convinced the buildtime is a typo, it simply cant be right that the national guard is costing more than twice that of a normal infantry unit in terms of total IC. Hopefully Devildread will take a look at this for his next patch.
However, even right now NG are better than normal infantry when on the defense, and use half the supplies/officers of normal infantry, which might be useful as leadership strapped nations that spend a lot of time on the defensive like say France or the USSR. It would also be really cool if the national guard forces of the US were represented in the starting GC scenario- this shouldnt be that hard to research compared to all the crazy deployments that happen in later scenarios and give the US a much needed boost to starting divisions.
The bigger question is why would a german player use normal infantry when he can build SS Infantry, given that they have higher starting morale and the axis land doctrine boosts it even further. The SS infantry now have double the morale of normal infantry in my game and its only 1939. It's going to be hard for anyone to stand against germany when their infantry regains org twice as fast as everyone else.