This is a "vanilla" AI cheat that is exacerbated by he sniper code when it's overtuned in a mod. If you shoot an alien in the original game the soldier that did the shooting is now "known" to the AI, and any aliens are free to psi spam and blaster bomb them until more turns than the aliens' intelligence have passed without re-spotting.
I think the vanilla spotter for psi was fine since psi wasn't a line of sight attack anyways and was mitigated by distance and psi defense. In fact, I'm not sure it would be too bad if the aliens didn't even need to spot an xcom unit before being able to psi attack it.
Was the blaster launcher the only weapon that used the spotter mechanic in the original game? I don't think the blaster launcher carrying aliens ever had any other weapons like grenades or plasma pistols. At any rate between the bugs and alien accuracy, it seemed like the aliens did as much damage to themselves with the blaster bombs as they did to xcom.
But yeah in some mods ones' troops can't go outside if they can't tank whatever the enemy is packing. Unless they always whack 'em from behind of course.