no Sinister Strike = no Bandits Guile

I'm actually toying around with dagger combat while weaving backstabs into my rotation though I'm not pulling as much dps as mutilate I'm still doing decent dps. I'm also not having too much of an energy problem right now with any of the three specs. All the gear that seems to be dropping is crit heavy and I'm reforging it when I can into mastery or haste.

No Bandit's Guile, no aggression, no imp SS ... basically the best talents for DPS increase per point are passed over for Combat daggers. Not to mention Blizzard's stance that much like SP Enh or DW Unholy, Combat daggers is not intended and will be broken if proven viable.

More to the point of concern with energy capping — it should never be a problem as long as every GCD is used because then there is no "wasted" energy.

"no aggression"

Aggression does work with backstab.
You'll still miss Imp SS though.

I'm not saying backstab should replace SS. Ofcourse you could open with a SS and before doing a finishing move use RS which refreshes bandit's guile. My question was could combat spec get to a point where integrating backstab into our rotation would do more damage then simply spam SS with an axe or sword.

It almost surely won't be worth it. You'll be required to use SS a fair number of times to keep moving through Bandit's Guile. However, your SS will be significantly gimped due to the fact that you're using a dagger (1.8 speed tops lowering base damage, with a much lower normalisation factor for AP), which probably negates the benefit you could gain from using a potentially-higher damage Backstab at other moments.

Additionally, if special attacks can proc Main Gauche, that too would lower the benefits of using a dagger.