Consider the vastly more bombs dropped on Germany day and night, far more than V-2's ever could have dropped. Aside from destroying the oil infrastructure, it's hard to see the military value of destroying city after city, and that bombing was much more precise than the V-2s.
For rockets to be effective, one needs either precision guidance or a nuclear warhead.
Randomly hitting a city has a very small chance of hitting anything with military value.
> terrifying
Sure, but it turns out that terrifying citizens tends to harden their resolve to fight on, rather than surrendering. On both sides.
They were much, much better.
EDIT: It appears the V2 in testing had a 4.5km CEP, while he minuteman III has a 200 m CEP.
They were developed independently of each other.