First of all, Suetonius isn't any worse a source than any we have for ancient Rome. Even the bit that give him this poor reputation are terribly useful.

The accusation of Suetonius being little more than a tabloid is common enough I wasn't able to track down the origin of that comment, but where it occurs it occurs with comments like Suetonius focuses on personal lives and passes along rumors.

For an ancient Roman historian (as you see, for instance, in the preface to Livy's history, and in Sallust's monographs) "history" is supposed to be salutary; reading the praise the great deeds of men of the past are supposed to inspire the reader to imitate those deeds and win such praise themselves, or provide a refuge from whatever political problems the reader has with the memory of ancient virtue. Suetonius hardly does this when he writes about Vespasian shitting himself on his deathbed.

The fact that Suetonius doesn't live up to the expectations of the ancient genre of History shouldn't prejudice him or his evidence though; in the first place Suetonius isn't an historian. He's a biographer. He is interested in the personal lives of his subjects. He writes thematically, not chronologically. According to the OCD, this interest in theme and in personal lives instead of politics and war is a feature of a Hellenized elite culture. So, he's doing something completely different, and people who are bothered by this are bothered because they're expecting Suetonius to be Cato the Elder, which he isn't and he doesn't want to be.

Suetonius does use a lot of rumors and has information that probably couldn't be corroborated even in the ancient world. He had access to the Julio-Claudian archives, including private papers. But he tells us when he's using these things, mostly, and he tells us when he uses rumors.

For rumors, well, they're tricky if you read them carelessly, but for some things, like the accusation that Caesar and Octavian had a sexual relationship, they are really illuminating, because we see the accusation was made by Antony's partisans, and hence have an idea of what a Roman political smear campaign would look like.

The private papers give us a peek at early imperial administration. Unless you are so skeptical a reader that you think Suetonius is lying when he says he has such-and-such a letter.

Just because he's not an "historian" in the ancient sense doesn't mean he has bad information or is somehow "less" than what we want. If you take him on his own terms - as a hellenized biographer - and pay attention when he tells you something is a rumor, he's fine.