For me it's the lack of invulnerable save that would keep me from fielding him, (even though he has the feel no pain rule) and the uselessness of the enhanced rules for the other squads.
Being an IC, and therefore being able to be singled out in CC, (where he could do the most damage) it seems he can get whacked fairly easily with all those power fists/claws and melta weapons roaming the tables these days. Instant death hangs over his head pretty heavily. The rod of torment is one of the nastiest CC weapons around, but he only has a I4 and it isn't a power weapon to boot. Sure it can inflict instant death, but at a meager S5 attack, (meager for an IC with special rules and weaponry) he really isn't a MC killer or vehicle buster that many other IC's can be. Too many other IC's have I5 to beat him to the punch, (literally) in CC and can cause him to suffer an instant death too. With that needler he has he can be pretty nasty, being that it's assault3, but it has a shorter range compared to the bolters that the unit he inevitably is going to be attached too is going to have. It isn't a huge drawback, maybe not even worth mentioning, but can be one of those things that makes you go, "damn it" when he is out of range for that one important player turn. It also allows armour saves as it is only AP6. Kinda sucks really.
Points wise he is 50 more than a base demon prince, and only 5 less than Kharn who is a true CC monster who has a inv. save and better stats overall. So he sits in the middle of two choices that can be quite powerful on the table in the same points range.
The instability of the enhanced warriors can add a little bit of fun to an otherwise boring or repetitive chaos marine list, but I can see them being aggravating after a few games, or maybe even a few turns depending on the enhancements that were granted. Also, the enhanced rules can only improve standard chaos marines.
So you are left with standard chaos marines to experiment on, and they now become a CC based unit due to the fearlessness and increased strength. But now they are just about as pricey as berzerkers who excel at CC but do not have the furious charge like 'zerkers to make them a beastly CC unit. So why upgrade a unit to be CC orientated and yet not really benefit anything from them in close combat? With only serious drawbacks to suffer from an unlucky dice roll and no real noticable improvement to gain, why do it to begin with?
He seems to be all over the place with his rules and equipment and really doesn't fit in one category or situation better then the next. Is he a ranged unit or a CC unit? Were is he better used? He just doesn't have a set place in an army build that you can benefit from his use.
That's my opinion, take it for what it's worth.