Denethor

Is it as bad as it looks like?

My suspicion says: yes.
Too expensive for his drawback

I admit that there are better 4 cost allies but this IS NOT bad. Leadership excels at getting resources in resource pool so the cost isn't horrible for them. But don't forget that Aragon decks that use sword that was broken will make sure that denethor doesn't go away without a lot of help from encounter deck. When compared to other unique allies such as dwalin, gloin, erestor, and more denethor is statwise superior. Faramir overshadows denethor but that's his only real problem. Also consider, elrond/vilya based decks include warden of healing and thus u can heal 4 wounds and increase denethors will.

Conclusion: denethor is in fact Very good but can't just be splashed like faramir. A worthy consideration for any deck that uses leadership hero(s).

Too many circumstancial considerations for my liking.
There are also treachery that will wound all your heroes by 1 when they are revealed, taking Denethor from 3 willpower to the discard pile.
This is why I usually prefer not to discuss on assumptions. You can always find a scenario to back your PoV.
Much more relevant is that you can probably count on having at least 1 wounded hero by the time Denethor hits the table, which makes him a nice addtion to either questing or defense. Since you can only use him for 1 of those things though (usually), he becomes either an expensive quester or an expensive defender, from where I´m standing.

^^*^^

Agree for the most part. Denethors most comparable card when u assume he falls down to 2 will is the dwarven lantern bearer (think I got name right) whose 2/1/1 dwarf for cost 3. But denethor having gondor keyword and higher stats makes him worth the extra resource I think.

Denethor's drawback is easily avoided in a two-hero secrecy deck. You can even have him out turn 1 with Timely Aid (TRG) and you have a questing machine. I'll admit he's not auto-include everywhere, but in the right deck, he can shine.