I absolutely agree. Fresh is the best way to go. However in my case, I simply do not have free access to it.
Actually, the powder doesn't dilute all the way. It does stay in mushy-powder form in the water, and I stick the pellet into it and have it stay surrounded by the garlic powder. It still proves to be quite effective, because there is amounts that do dilute itself. The physical particles that come with the pellet into the tank (I do make sure there isn't too much powder though) free flow (it's very little amount). If my bettas see it, they DO eat it, which assures me it's completely safe. :) They do seem to love garlic...