Gambling on losing teams is a legitimate strategy, but more than betting on losing teams I think it is evaluating the risk/reward scenario with a specific bet. Sure, there might be a team that is likely to win, but maybe it pays a penny to the dollar. Basically, winning that bet doesn’t make a difference. I get more entertainment out of betting longshots and making sure the reward is worth the risk.
If the popular team or fighter become an underdog, I think it's good to bet them because usually they have a good chance to pull an upset. But for a mediocre team or fighter, I don't think it's wise to bet them because they mostly lose, only few times they win.
I never want to bet on a huge underdog, it's just like a lottery where the chance to win is near to zero.