I don't understand this. Why does Tranquility overtake Psychosis on Dominating all of a sudden? Care to elaborate?
The HP bloat and additional enemies.
On Hard and below, Psychosis can alpha strike and kill everything. The "I win" button for Psychosis is Premeditation+Psionic Mania Cryo Orb; survey any survivors and pick a central one; ThermoD; TK Proxy; Psi Booster if necessary; TK Punch. If necessary, Adrenaline and then Electrokinesis to stun surviving robotic enemies like Dreadnoughts.
On DOMINATING, you can not reliably kill everything in an alpha strike, so you need to be able to do more things. Tranquility lets you do more things in a turn. Combined with Thermodynamicity, Tranquility can often activate six or seven abilities in a turn. When facing really large groups with additional really strong enemies, you need shenanigans damage. The flatter, more predictable outcomes and extra actions per turn of Tranquility let you handle things much more elegantly.
Of course it's true that if you're just going to abuse initiative and the AIs tendency to group up around a Force Field, you can just ThermoD+proxy+punch and probably glide through the game with just that. But if you want to play a less cheesy, exploity version of psi, then you're going to put your self at great risk. Tranquility manages risk better than Psychosis.