Oh we can go invisible, but we can't do shit but walk around when we're invisible, when we want to attack, we have to go back visible which takes like 3 or 4 seconds before you can even do an attack, and by that time they've turned around and spotted you, and start shooting at you because they shoot at every person they see.
Spies really aren't supposed to run around attacking people, though. It's more of a recon class. Friendly fire does make it sort of suck, though, due to people reflexively shooting their teammates to uncover spies.
What I think would be better than friendly fire is mirror damage. Like, if you shoot your teammate, they don't take any damage but you receive, say, 50% of what they would have received. You would, of course, get griefers that run in front of your rocket to screw you over, but to counter that they could make it so that projectile weapons either don't do mirror damage or that mirror damage isn't done after the projectile is in the air for a given period of time (500ms, perhaps).
They really nerfed the spy compared to TF1/TFC. Even if friendly fire were on in those two games the spy had a very nice grenade type that really messed with the players (it caused hallucinations and warbled the view slightly).