Not to take away from git bisect (or hg bisect, which is no more broken than the rest of mercurial) -- I don't think it is an alternative to the thing you used to do.

git bisect is "temporal bisection", i.e. you delete half of a time interval. The manual bisect is kinda-sorta "spatial" in the sense that you delete half a region of code. the two things work by similar principles, and their problem domains overlap -- but they are not the same.