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Flea, Since no one else has answered you, I'll give it a try. Please understand that I no longer grow epi's myself, but do grow a lot of relatives to them.
The form that your epi now has is called "neotenic", which basically means it looks like a seedling. If you were to start epi seeds(or their relatives), you would expect to see plants looking like yours during the early part of their life. It is likely a more efficient growth mode to better help young plants or stressed plants to survive.
One can assume from the pic that the environment of the plant is not appropriate for it to grow the normal, flat epi leaf/stem. What you need to do is to take a look at the conditions that you have been maintaining the plant in, and change those conditions to ones better suited for epis. When I was growing epis, I would see neotenic growth such as yours when the plant was not getting enough light, or at times, when I kept it too dry, such as in the winter. That does not mean your conditions are too dark or too dry, just what was happening to my plants. However, think through your local environment for the plant and change it, then see if the plant growth over the next year will improve for you. My best guess, seeing your picture, is that your plant is not getting enough light.
I would keep the plant and experiment a bit to see if you can get the conditions a little better. It would not make sense to me to throw it out and start over, since new plants under the same conditions might do the same thing. Rather, take the plant you have and use it to learn what they need. If the conditions are right, the plant should resume normal growth patterns.
I hope this helps. I gave up on my epis (but not rhipsalis) because I could not maintain the right winter conditions for them here. Our house is way too dry and didn't have enough big windows to host them during the cold months.
Do you have any other epi's? Can you tell us more about the growing conditions, such as light, temperature, how often you water, etc.?
krowton, I don't know if Flea is still watching, but you have answered a question for me. I have a couple of cutting that are doing this. All of my others were started outside, but these I put in my makeshift greenhouse, and kept a bit drier. Guess I better move them outside soon.
I had this outside most of the year in late afternoon sun. BUT the summer was so hot here last year at 90 to 100 for so many months that maybe it stressed out the plant? I think I gave it enough water. I have other epis that don't look so good either but I'm going to experiment with it now and see if I can get it to good health again along with my other epis. How much water should epis get? When they dry out? Should I be holding back water any time of the year?