No, it's not enough to make them unplayable. Overwatch only really matters if you have blob guard or ork hordes, where the sheer volume of shots is bound to kill something. In the grande scheme of things it isn't game changing.
I also love my Thousand Sons and have fielded them in a campaign and won-lost ratio was about 60-40. I got slaughtered the first couple of games though, because they are tricky to use until you get used to them.
I ended up putting them in Rhinos, and then disembarking and rapid firing those ap3 boltguns. After a turn, they can then walk around freely, rapid fire, and charge. And this more than makes up for there lack of overwatch.
A lot has been made about them dying easily to small arms fire and thus people have claimed they are very hard to use. I am not sure why though, as it's not exceptionally difficult to keep them away from small arms fire. I keep most things away from rapid fire weapons actually. Who doesn't? It's not that difficult - there is a thing called LOS and cover.
Also, Ahriman with Telepathy is totally worth it: Invisibility on 1ksons squad is magic. 2+ cover save with 4++. They can then rapid fire ap3 and assault in the same turn, while the enemy is hitting on WS1. It has made most players at my gaming club laugh and cry...