I largely agree with Sancta... rules-wise, decidedly possible. Sane-GM-wise... very unwise to allow it at the table. At very minimum, it
a) storywise leads down a very dark path.
b) mechanically can imbalance the game very severely.
Now, a) might appeal to you for a single given story, flirting with darkness (and I get that- go for it), in which case I'd honestly hand-wave it... but by the time you're doing it often enough to need a set mechanic for it.... dark doesn't really even begin to cover it.
4. Allowing mental attacks makes it harder to make a tough character, even with mental Toughness powers. (After all, it's harder to defend multiple stress tracks.) This causes some people to disallow them.
Side-note Sancta... in the hands of a NPC, such powers are exclusively at GM discretion, and he's either a good GM (who you can trust is interested in telling a good story, not destroying the party), or a bad GM (who will find a way to destroy the party even without), and either way it doesn't matter.
In the hands of a player, vs other players, you have a fantastic point.
And in the hands of a player vs NPCs, again, the GM has options. It's fair to say that against humans, it works GREAT... but violates the 4th law, quickly making the character hard to play.
And against non-humans, it's easy to justify some innate heavy psychic armor (if they're below 1 refresh, that represents being chained to their nature to a truly alien extent. Bending a fixed point is at minimum hard-as-hell, and the more fixed, the harder)... easy rule of thumb... give anything with a 0 Refresh Conviction/Mental Defense of 5... and armor equivalent to their negative refresh... and bam. No more Jedi Mind Tricks on Faeries (at least... not the ones you couldn't have just bribed or talked into it without any mojo).
I still agree with you- but I think this particular point is easily made moot.