"I'm going to tell...." is a threat that little children catch on to very quickly, and so I think the notion of blackmail as an effective tool goes without saying. However, one should not press its effectiveness too far! Many people have things about themselves they would not want disclosed, some would be willing to pay a great deal to kept it secret. However, it is the basis of many a movie or novel in which someone gets killed and blackmail is often a motive. Perhaps the very effectiveness of blackmail is a strong argument against using it.
Blackmail is an effective way of getting what you want. In fact, we've used blackmail as a way to get what we want ever since the elementary school days. Everyone has been blackmailed and has blackmailed another person at one point or another. In fact, detectives use blackmail when interrogating a suspect.
While threatening someone with incriminating information to get what you want seems fool-proof, this plan could easily backfire. For instance, if the person you've blackmailed decides he or she doesn't care if you reveal the information you used for blackmail, this could result in shame and embarrassment for you. Also, everyone has secrets, and you never know if the person you've threatened with information knows details about your life that could serve as an effective blackmailing tool.
Blackmail usually works as a tool to get you what you want, but it is not necessarily an "effective" tool. When you blackmail someone, you always run the risk that your prey will "snap" and either harm you, or break to the point where they do not care about the info you have blackmailed them with. In the end you could wind up either being seriously hurt or outed for your lack of character and devious nature.