Then you have Mist which is an uncounterable potentially permanent defense against all attacks in the game,
The thing about mist is that you can't move or heal at all with it up. It's incredibly funny to see an Erebus use mist, because all it means is I just walk out of the cloud and in front of his exit route, and just wait for him to reappear, with less mana and nothing to show for it. Unless you're fighting against Rook or UB (it could be said that it's useful against Regulus, but you usually won't be able to see him when he uses snipe anyway), the move is more likely to get you killed when against someone good then anything.
You don't even need to take it against rook either, just ask OrexxerO. All it takes is some fancy footwork to avoid the hammer... and not being stunned by that god damned rock...
an AOE stun,
With a full second cast time. Rook's stun is much better.
a teleport which has massive range and does decent damage,
I'll admit, it is nice. But it costs so much mana that the range and damage are justified.
his passive life steal,
It's really not that good, I've stopped incorperating it into my builds, stopping at the second level of poisoned blood. Unless someone can show me numbers that say otherwise, the health gain is too low to be worth using.
his passive health regen,
It is indeed awesome, I'll admit.
and he is the perfect DG killer.
I'd put him up there with UB and Reggie as the best DG killers. All three excell at different things in terms of DG killing, and do it in different ways.
I generally take Cloak of Night with him, which allows you to play a hyper aggressive game and punish any weakness at all. And this is the key to why he is so good. He can farm the worst player on a team and then get too powerful to be killed by anything less than a full health 2v1 or even 3v1. And when you get double / triple teamed, you have three defenses (mist, bat port, cloak port), so you can pretty much never be killed unless you overextend to an extreme extent.
Cloak of Night sounds cool and all, but seems a little redundant for my tastes. I think I'll stick with ol' faithful, the good old anklet, simply because I like to dart from flag to flag.
Edit: And even in games with all good players, he was, and I'll stake my reputation on saying still is, a highly competitive choice. But his main flaw before, which I still think has probably not been fully resolved, was magnifying skill differences in a way that ruined public / friendly games.
To be fair, we want every demigod to be a competitive choice, right?