The true difficulty in being a Psi user comes from managing the various abilities and tiers effectively. Juggling between 5 tiers of abilities and whichever weapons you decide to utilize can be interesting, especially when many situations
in the game demand reflexive decisions. Also, psi hypos are one of the most costly resources in the game, though with use of certain psi skills, one can effectively replace anti-toxin, radiation, and med hypos all with the psi hypo. As voodoo47 said, using psi becomes uber-powerful and rewarding in the late game, but the early game cost to invest in psi can seem pretty steep.
If you feel like you're taking more damage, maybe you haven't put as many points in endurance? The difference between having 1 level of endurance vs. 3-4 is significant, so for anyone having trouble with taking a lot of damage, spending some points in endurance can be a huge boost.