Correct. They do work best in cooling dominated climates. Since they are basically an AC unit, they also help with a bit with humidity.
Even in cooling dominated climates, they still might be better off than resistance heating as you probably will use gas or other fuel that is cheaper than electricity (BTU for BTU) (although you would stll be better off using that fuel directly to heat the water (indirect with HE boiler, HE WH, etc.)). If you are running an electric furnace or electric baseboards, than this would not be true.
I understand that the operating cost for these things is based on what the unit uses and does not account for heat that may have to be made up. This gives many people a false sense of savings because most of the general public probably do not understand how these work.
Personally, I will stick with resistance based WHs as they are cheaper to buy and are much less expensive to repair.