The term "nationalism" is used in at least two very different ways. The particularist use is more accurately termed "national chauvinism", usually but not always ethnically-based, is the idea that one's own nation is in some way better than all the others, and the interests of its people should be accorded disproportionate weight. Note that this kind of nationalist doesn't necessarily care about political organization outside of his own country; he has an ideology about his nation, not necessarily about nations in general.

I would agree that used in this sense, "nationalism" is basically indefensible.

There is a different, generalist use of the term "nationalism," however, which traces academically to people like Ernest Gellner, and philosophically, arguably back to people like Friedrich List. Nationalism in this sense, is merely the proposition, "National boundaries should coincide with state boundaries." Importantly, it doesn't require ethnically-defined nations, merely people who self-identify as being part of a common national community, whether that be based on blood, culture, or something else. A natural corollary of this view of nations and nationalism is that, at least in the world as it actually exists now, everyone is either a nationalist or an imperialist (one could carve out a small exception for anarchists).

In this generalist sense of "nationalism," which makes claims not about "my nation" but about "all nations," I think there are tradeoffs on both sides. I identify as an somewhat ambivalent nationalist. But unlike the the first sense, I don't think you can argue that the nationalist position is prima facie inferior from a consequentialist standpoint.