I'd prefer a game to have melee as a viable option, for the sake of veried gameplay, instead of making it a useless tool that'll never be halfway as powerfull as any gun in the game.
As for COD (MW2 beeing my last COD) i don't find the knife imba. While it can be fun to run aroudn knifing people, i found that some of the shotguns also 1-hit, and at a better range, even if the knife has commando.
with stopping power, the UMP can kill in 2-3 bullets to the body, which it fires nearly as fast, and can do so over far greater distances.
If I missed my first strike with the knife, most slightly skilled players would take me down before i could strike again. And knife sucks face-to-face, against guns, cause hey shoot you down before you get in range.
Nerfing melee in FPS games would limit it to beeing used to hummiliate people, by killing them with a very inferior weapon, instead of having i as a viable option.
Having the knife be insta-kill, opening up the chance to spec melee, adds more variation to gmaeplay, which IMO is good.