I have no experience using Core Data in the manner you describe, but my understanding of the architecture leads me to believe that it could be used, depending on how you plan to query and manipulate the data.
Core Data is very good at maintaining an object graph and using faults to bring parts into memory as needed. In that manner, it could be good on a server for reducing memory requirements even with a large data set.
Core Data is not very good at manipulating collections of objects without loading them into memory, making a change, and writing them back out to disk. Brent Simmons wrote a blog post about this, where he decide to stop using Core Data for some of his RSS reader's model objects because an operation like "mark all as read" didn't scale. While you would like to be able to say something like UPDATE articles SET status = 'read', Core Data must load each article, set its status property, then write it back to disk.
This isn't because Apple engineers are stupid, but because the query layer can't make assumptions about the storage layer (you could be using XML instead of SQLite) and it also must take into account cascading changes and the fact that some article objects may already be loaded into memory and will need to be updated there.
Note that you can also write your own storage providers for Core Data, see Aaron Hillegass's BNRPersistence project. So if Core Data was "mostly good" you might be able to improve on it for your application.
So, a possible answer to your question is that Core Data may be appropriate to your application, as long as you do not need to rely on batch updates to large number of objects. In general, no algorithm or data structure is appropriate for every scenario. Engineering is about wisely choosing between trade-offs. You won't find anything that works well for many clients in every case. It always matters what you are doing.