Facebook, reddit, twitter, blind are like halfway betazoid telepathy on start trek. If you knew exactly how others judged you internally without them saying it, you would be devastated as a human. But the betazoids were fine. Maybe we just need time to develop coping mechanisms.
Star Trek has enough WTFs with biology (see e.g. "Genesis", where some virus that alters people's DNA causes extreme body modification including bone growth over a period of a few days, and changing their DNA back to normal also undoes all the body modification; everyone who's lost a limb wishes DNA worked that way) and physics (to give just one example: in "The Next Phase", Geordi is "phased out" and can walk through walls but doesn't fall through the floor; [2] claims the writers had an explanation that was cut from the episode, but the comments poke further holes in it), not to mention other plot holes (e.g. in DS9, in "Tears of the Prophets" the Dominion has created a bunch of cheap and powerful orbital weapon platforms that should turn the tide of the war with the Federation; the main characters manage to plant a Federation warp signature on their power source and cause the automated weapon platforms to destroy it, after which the Federation destroys the platforms and retakes that one system; patching this vulnerability should be trivial and there is no reason the Dominion shouldn't start setting up orbital weapon platforms in all their other systems, but they don't, as if some dumb villain said "You have failed me!" and killed the underling and scrapped the project (and as if the Federation knows this happened, because we never see anyone say "Gosh, what'll we do if the Dominion makes more weapon platforms programmed to never shoot their power source no matter its warp signature?"), but we don't see that scene; but then for some reason you see a few more platforms in one system a year later when it's too late to matter), that I put "the writers didn't seriously think it through" near the top of my list of explanations whenever something doesn't make sense to me. So I wouldn't take the depiction of Betazoids to be evidence that Betazoids could work as depicted.
To play devil's advocate with the Betazoids: telepathy might make tyranny much more workable, if you can use it to detect any signs of betrayal, and beat people into submission until you can tell that they are fully cowed. You might, then, expect a stagnant society dominated by a despot and his loyal henchmen. On the other hand, maybe they could take the strategy of feeling completely cowed, but then, when they happen to see the tyrant in a vulnerable position, suddenly feeling strong and vengeful; the propensity to react in that way isn't an emotion, so the tyrant might not be able to detect it. (I think some humans have that kind of reaction for similar reasons.) Who knows. (Or maybe they gave themselves telepathy via genetic engineering after they'd developed spacefaring and had a stable, non-tyrannical society.) We don't actually have proof yet that humans will reach the point of colonizing other planets, though it does seem plausible.
[1] https://www.theatlantic.com/entertainment/archive/2014/06/st...
[2] https://scifi.stackexchange.com/questions/5798/why-didnt-geo...