There isn't really a bad time to run Cover 2. It's really a base defense that you can run at all times in pretty much any situation. I kind of play the Tampa 2 defense: jam the WRs off the line before dropping into the zone, controlling the middle linebacker over the middle, and hoping the defensive line can create pressure before a WR gets open.
The way to beat this, offensively, is usually running straight at it. So I would say the one time not to use it would be when you're expecting the defense to run between the tackles, unless you're excellent at shedding blocks with a defensive lineman or linebacker.