I've played Total War and whenever I used chan shot in that I would have used it to essentially cripple a ship, in this instance, damaging the ship's sails to prevent her from moving. In the game, there is a chance that chain shot CAN take down a ship's mast but it's a lucky shot (much like David said).

In another game I've played, chain shot is usually half-way between ball, and grape. So it has 1/2 the range of normal ball, but twice the range of grape. But in another game (where things are more realistic), chain shot still has a pretty far range, just shy of normal ball range.