So hes a weaker hunk of garbage with a 1/5 chance of surviving in CC long enough to actually USE his D Axe against anything worth it's salt?
No. About 3/4 (against a Melee Wraithknight) or 4/5 (against an Imperial Knight) chance of getting to swing.
If it gets deathblow-ed, it dies before it attacks. If it doesn't, it may take a couple of wounds (one non-deathblow destroyer hit isn't too big a deal), but it will almost certainly murder the Knight or Wraithknight outright.
I can't think of any model in the game that can reliably survive 8 WS10 Destroyer attacks (without pulling stuff like invisibility into the bargain, anyway)
Trust me, it's still a damn effective big unit killer. Plus, in Daemons of Chaos (rather than Khorne Daemonkin) you're not stuck with the Great Axe if you don't want to be - a 10 point gift gives you the alternate weapon option of the Aetherblade.
Example
A wraithcannon wraithknight (a not inconsequential monster hunter itself) will probably get 2 bursts from its wraithcannons into the bloodthirster before it makes contact. That's 4 destroyer shots.
Each one has 2/3 chance of hitting, and each hit a 1/6 chance of a deathblow. That gives you an 89% chance of surviving each shot. 4 shots you're down to just over 64% odds.
Assuming you've not taken a deathblow hit, each shot has 2/3 chance of a hit, each hit a 2/3 chance of a non-deathblow destroyer wound, which has a 1/2 chance of not being jinked, and does an average of 2 wounds if it gets through. That works out at an average of 0.44 wounds per shot - so, assuming you've not been hit with a deathblow (which happens 36% of the time) you take an average of 1.8 wounds.
The wraithknight does strike first, but is now only 4 attacks (well, even with a ghostglaive it's 4 attacks, but it has master-crafted which might as well be an extra attack). With 'only' WS4, S10, A4, landing 2 hits is tricky, which means there's no way it can reliably kill a 5-wound 'thirster. If it takes an extra wound off, it's done well - the average is about 0.7.
Then the great axe swings and the Wraithknight dies. Worse, in fact, because it has no scattershield.
Note that this is assuming you glide up the battlefield. If you deploy hidden and swoop turn 1 then it's quite likely the first shots will be at a Hard To Hit flyer - making things even worse.
In short, an Insensate Wrath 'Thirster will always come out of this sort of fight wounded, and in many cases may only 'take the enemy with it' - but as long as it costs less than the enemy superheavy and the odds are that you'll win, what more do you want?
It's kind of like the lord of skulls. The Lord of Skulls can beat most knight-esque units in a melee, because whilst you strike first, the odds of deathblowing it are relatively low (even a charging ghostglaive wraithknight has only a 45% chance of landing such a hit) - and if you don't, with 9 hull points and the daemon rule, you won't kill it with
HP damage - and then you've given it a ridiculous number of return attacks with the great cleaver due to Fuelled By Rage.
The thing that makes the Lord Of Skulls useless isn't initiative or weaponskill - it's the price; The Insensate Rage 'Thirster has almost the same damage output for less than 1/3 the cost (because it's carrying no ranged weapons and can be hurt by arms fire from a third party).