It is no longer a waste of leveling time to battle pets with lower level characters. With the advent of patch 5.2, players can now earn XP from pet battles. (If you’re max level, you have a chance of getting Lesser Charms of Good Fortune instead.) All you have to do is participate in any pet battle — other than dueling — with your highest pet being no more than five levels above the pets you are fighting. This includes pet battle PvP, where you queue up from your pet journal, just not the pet battle duels you can do with friends … or strangers, for that matter.
The experience is comparable to completing the capital city cooking and fishing quests. For example, level 77 mage gets 27K XP from the Orgrimmar cooking dailies and gets 26K for fighting a battle with three level 1s vs. a level 2. The XP varies according to how much higher your highest pet that your battling with is above the pets you are fighting. A four level difference nets my mage about 21K XP. Whether you are battling other players, wild pets or tamers, the XP gained is consistent.
Is it worth it to try to level via pet battling? I would recommend questing, gathering, archaeology digging and battling pets in the same zone to maximize your leveling potential. But if you’re in a gotta-catch-’em-all frenzy, you can battle pets with your leveling alts while still progressing more than just your pets.