I'm currently DM'ing a game where I allowed the ranger to take Distracting Attack. I think it's working out well, and not too powerful for a couple of reasons.
The opponent is considered flanked by the ranger, not completely flanked for all purposes. Therefore, unless a ranged rogue has some way of threatening with ranged weapons, they don't complete the flank, and can't sneak attack. If they're a melee rogue, they'd be maneuvering for a flanking position anyway, and with the Tumble checks such characters can pull off, it's likely that they'd succeed. And finally, the benefit extends to only one attack, so a rogue with iterative attacks only flanks for the first such attack.
You may notice that I've only discussed rogues in this argument. That's because flanking really only has the strongest game benefit for characters with the Sneak Attack feature. For everyone else, it's a small attack bonus, which while useful, isn't overwhelming.
Like I said, I'm running a game with such a character, and so far, I'm not finding it to be too overpowering. Now, if I could just find something to do with those players that insist on playing mounted combatants...