You're more interested in response time than CPU usage; the customer is having a bad time whether the slow responses are due to CPU or IO or bad weather.
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There's a reason why ISPs bill at the 95% -- it's directly correlated with costs of over-subscribed resources. If you're running a VM cluster, you've got a similar issue, only with CPUs (and memory) as well as than bandwidth. Most operational divisions don't have the luxury of fixing a vendor application. Instead, they have limited variables to play with: CPU cores and memory being the coarse levers. While one could argue this is an "application" issue and you'd be correct, it's irrelevant to my question.
I'm asking what tools are available for system administrators to diagnose and address CPU starvation (under spiked usage). Current tools and techniques I'm aware of don't seem to measure this.
That being said, historic CPU utilization is a useful metric for capacity planning.
I think your concern about measuring CPU utilization is real, though. You can use frequent sampling and present samples on a heat map to deal with this problem. There are some examples here: http://www.brendangregg.com/HeatMaps/utilization.html