I frequently see characters called "Mary Sues" on boards about movies or books, but I've never heard this phrase used in real life.
Most Helpful Guy
I've only seen it used online too -- not in real-life conversations about books and movies.
The phrase existed before people commonly used the Internet, BUT from what I've read about it, it was first used among fans of STAR TREK to refer to certain characters in cheesy fan-fiction stories about STAR TREK, so it's definitely not a term that everyone knows about.
Plus, it's clearer and more natural in real-life conversations for people to say "that character is too perfect at everything" than to say "that character is a Mary Sue", which not everyone will understand.1