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I think family names are best as middle names. I think it places expectations on the child and also possibly transfers difficult relationships to the child (like you have issues with your mother and then name your child the same name which you have mixed feelings about.) I particularly think it's a bad idea to name a child after a family member who is abusive, etc.
I would not pass my name on as I don't think there are solid nickname options and I want them to be their own person.
People sometimes regret using family names for the complex reasons mentioned. People also sometimes regret giving their kid a "trendy" name when they don't think it suits them.