This card is pretty useless in the basegame, isn't it? What kind of text does it wipe that would be worth this? If damage and traits stay?

Swamp Leech!

I'm sure there will be scenarios where this will be amazing, but I've not yet seen a need purchase this card over the other more consistently useful purple cards. 

To try and make a fighting argument for the card I can see it being useful if you pulled Stubborn Detective as your weakness since his card text is really annoying.  Also I guess you could stop a Wizard of The Order from collecting Doom.

I think it's pretty funny the idea of mind wiping a little Swamp Leech

Since it only works for one phase it wouldn't stop the wizard I guess. But what about Udumorth? If he loses all his text,does he have less life? And if he isn't massive anymore, does he move into the threat area of one investigator for that one phase?

http://arkhamdb.com/card/01157

You can use it in the Mythos phase to stop the Wizard's Doom accumulation for that phase.  It wouldn't stop the Wizard forever, but it could give you a one turn reprieve to deal with the Wizard before he advances the Agenda deck.  Also if you instead use it in the Investigation phase you could turn off his retaliate keyword which can really give you grief.

Udumorth is Elite.  Mind Wipe cannot effect Elite enemies.

Since it only works for one phase it wouldn't stop the wizard I guess. But what about Udumorth? [...]

Although the idea is great Udumorth is elite, so you cannot mind wipe it