I've been pretty pressed for time IRL, but I really want to make a couple points here.
The V1, while dangerous to the civilian population, misses the most effective aspects of strategic bombing due to it being solely an "area bombing"* weapon.
A close look at the strategic bombing campaigns against Germany shows a few things.
1. 'Precision' strategic bombing was incredibly damaging to the Reich. Within months of targeting POL infrastructure, the bombing caused apocalyptic damage to the industry and effectively destroyed Germany's ability to use motorized/mech/armor divisions. The much maligned Schweinfurt/Regensburg raid not only caused damage to a ball bearing plant (causing mild supply issues as stockpiles we're found and tapped) but caused a 1,000 plane production reduction at Regensburg over the next few months (Strategy for defeat has an interesting chart outlining this. Free internet versions are available). Consider that; a raid considered a costly failure removed 1000 fighters from the Luftwaffe mid war. In fact, this raid combined with the (rare event) supporting British raid on related facilities that night, led to the Luftwaffe chief shooting himself.
Obviously precision is relative here. It turned out to be quite difficult to hit targets heavily enough and repeatedly enough, but despite this it still had an obvious, large and compounding effect.
Some of the other effects that the daylight bomber raids had were, in no particular order, smashing virtually every Luftwaffe base in France, destroying the road and rail net in Western Europe, forcing Germany to put over a million men into the air defense effort, forcing catastrophic losses onto the Luftwaffe fighter arm during "big week" raids and the continuing bomber offensive.
2. Area bombing of Germany achieved remarkably little. Despite burning large amounts of the residential portions of the Ruhr, "de-housing" the population showed much less effect on the war then blowing apart factories. It certainly wasn't great for morale, but it also had the effect of clearing out non essential jobs (the war can go on without the local dance instructor having her studio in operation) thus pushing a greater amount of the work force to large and thus more efficient production facilities or into agriculture.
This is without noting the failure of area bombing on numerous cities due to better geography and layout.
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What does this have to do with the V1?
The V1 cannot effectively target industry. As made historically, it can hardly even target urban areas. Burning London simply isn't going to hurt the UK anything like as much as burning the Ruhr hurt Germany, and the Ruhr being roasted didn't do all that much to Germany.
*Now, area bombing can also be described as terror bombing, but I use area bombing as (A) not all terror bombing has to be random and (B) not all area bombing is terror bombing (I wouldn't count the USAAF firebombing of Japan as terror bombing, though it was certainly area bombing).
Edit:
On the other hand, a theoretical kamikaze V1 has the potential to be a devastating weapon. However, Given that Germany failed to use its historical bomber efforts well (when they finally got around to hitting spitfire production it worked quite well, but they didn't follow up or hit that soon enough anyway) I doubt that they use these especially efficiently either, and there are a lot of morale and feasibility questions.