At valor 62, I can safely say that shields work just fine in PvP; regardless of what kind of elitist jerks style math people are doing, I can guarantee you it works fine.
I don't understand the choice of retractable blade at all, it does little to no damage and the dot is not impressive nor needed for rail shots.
I'm assuming you are looking for some sort of "tanky-dps" here; I would recommend getting more damage from rocket punch in the pyro tree and getting both t1 rail shot talents. Using combat-tech set 4-piece with the rest of your gear as tank gear you still remain incredibly resilient and can put out some impressive burst damage. It's really the only good balance of offense and defense I have been able to find so far without either going full pyro or full tank.
Just remember, your opener is basically using rapid shots until he's at around 80% then you start doing things like unload, dart, flamethrower, and flame burst. Rocket punch + railshot and spamming flame blast is your finisher.
Hope this helps.