I would never work under the assumption that 'everyone' is using stacking vulnerable items. Not many people raid in relation to the number who play. Touch of Flames is only going to be better when in a raid group that is all attacking the same boss. Even then one could argue you are being detrimental to the group for not taking 1st degree burns because by taking it you are increasing the whole groups DPS by 20% ensuring that someone has it. If you are going under the assumption that someone else will 'always' have 1st degree burns then you should touch of shadow because then you would still be applying dmg to fire immune creatures.
My recommendation is to have multiple options and the first one I craft would be 1st degree burns unless you know for sure others in your party/raid will be carrying them. For example, in my static group the others don't need 1st degree burns because they know I am bringing it (they are my kids accounts and are not on unless I am on so there is no chance that they won't have me in the party...). That being said you will likely have the materials for several tier1 upgrade options before you get the mats for tier2/3 (and still have plenty of the easy to get mats) so you can have multiple tier1 weapons before you upgrade one of them to tier2... In that scenario you do your party a disservice if you examine a long standing mob and note that one or more other people are keeping the mob fully Vulnerable (it is easy to see because the vulnerable buff will keep ping-ponging from being your effect to being some other or multiple other person's affect).
Regarding EE mobs, if you run a build like Cetus, Carpal, or the various Shiradi caster builds regular EE mobs die in a few seconds so Cardtrick may be right that just using Vulnerable weapon(s) may be questionable on them unless you can build stacks faster than 1/2secs (losing 1/3 secs)... If I was running a build like that with mobs dieing that fast and had three fully upgraded options with the only difference being tier1: 1st-Degree-Burns vs Touch of Flames vs Touch of Shadows I would likely use Touch of Flames unless they are fire immune and then Touch of Shadows and save 1st-Degree-Burns for long standing mobs (with the exception being if I was running a weapon attachment build).
The bottom line is that that neither you nor I nor anyone should be dictating what is always good/always better as it depends and educating others and letting them choose is likely best.
Regarding even EE "5K health" mobs dieing in seconds from a single solo character you can go watch some videos to see proof:
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