It isn't a problem if all you need is a deterministic sequence of numbers that are pseudo-random like what rand() provides. Not every use of a PRNG involves cryptographic security or potentially dangerous exposures of internal state.
There are concerns with using time() as a seed other than security. Besides, consider what you are typically trying to express: initialize my PRNG with a random seed. Almost never are you trying to express: initialize my PRNG so that all runs in the same second will behave identically.
If you're generating random test case input on a single machine, time() is a perfectly reasonable way to seed a PRNG. A super-robust entropy source isn't a necessity when you just want something nominally random between intermittent runs.
For test case generation, I'd argue that you want the opposite of a time initialised random number generator. You'd want a deterministic seed for your random number generator, so you can repeat if required.
That's a lot of caveats. Suppose you want to run multiple times in one second. Suppose you want statistically uniform random numbers to ensure even coverage of test cases.
