In a Limited environment (draft/sealed deck), Hixus, Prison Warden is actually a pretty powerful creature. There are plenty of situations where you'll be wide open for attack, let a couple of opposing creatures attack, taking damage from one or a few,. You could then block and destroy one, while exiling the others. Situationally speaking, this is something that can simply happen in Limited, where an opponent may have the beatdown on you early. Hixus is one way to potentially turn the game around on turn 5. Playing a 4/4 on an opponent's turn and being able to swing in during the next combat is good. From a Limited perspective, this is a rare that looks solid enough to draft.
I think it's fair to say that Hixus doesn't look like the strongest Constructed card. Against token-based strategies, Hixus is great in that if he exiles attacking tokens, then you'll never see them again. The fact that you have to take damage first sounds like a major drawback, but considering that there are simply times where you will have nothing on board protecting you, Hixus is better than you may at first realize.
The worst drawback is, of course, having to keep open 5 mana on your opponent's turn. Sure, you may have removal in hand to play anyway, so if you have nothing else, Hixus is hardly the worst thing to have in hand. At best, Hixus is probably a sideboard card in Constructed against weenie aggro or Red Deck Wins creature-heavy strategies. Being a 4/4 also means most burn spells won't kill him (Stoke the Flames shouldn't stick around much longer in Standard anyhow, barring a reprint.)
Soldiers are a strong archetype in Commander, so Hixus, Prison Warden should find a place as one of the ninety-nine in Soldier-heavy builds. His effect isn't really Commander material, but he can serve as a complementary piece. One cool combo that he can pull off is with Commander 2014 exclusive, Containment Priest. The Priest's ability causes any creature that would enter the battlefield without being cast to be exiled instead of hitting the battlefield. If you have a Soldier based strategy that isn't too token-based, this is a decent combo to have in your deck. Containment Priest is already a fairly popular card to shut down many opposing strategies, and since you can afford to take some major hits in Commander, Hixus can potentially be a game-changer if deployed correctly.
Hixus may actually be a better play in one-on-one Commander games (also known as Duel Commander) than in multiplayer Commander due to the nature of his effect. There's no worse feeling to an opponent thinking that he or she has you on the next turn, only to watch their entire army vanish before their eyes. Even if the effect is only temporary, it may buy you the time you need to swing the momentum.
Hixus is perfectly fine as a core-set rare. Being the last Core Set, Magic Origins is going to have some interesting cards like this that may not appear too powerful on the surface. While down the road Hixus will probably maintain bulk-rare status for eternity, like many Legendary Creatures with useful and somewhat unique effects, it doesn't mean he won't find a home in the right Commander lists.