While that Megamorph ability sounds a bit costly, it's an ability best used later in the game. Hidden Dragonslayer can deal with a lot of threats that many aggressive decks would face. Anytime that you can get a two-drop that adds value later in the game, that's something that will probably see at least some Constructed play.
Hidden Dragonslayer saw a lot of competitive Standard play, starting with Selesnya Aggro as a two-of alongside Den Protector. It also saw play in Megamorph decks with Mastery of the Unseen. This Enchantment not only could gain you a significant amount of life when cards were flipped face-up, but it could also "manifest" cards from the top of your deck. It would make that card a face-down 2/2 creature that could be flipped face-up for its regular mana cost. Hidden Dragonslayer was useful in this deck because not only could its ability essentially be used for one fewer mana, but you could easily manifest it without having to actually cast it.
By far, the deck that made the best use of Hidden Dragonslayer were Collected Company decks as a one-of in the sideboard. As a two-mana creature, it was a hit off of Collected Company. While a lot of its value comes from its flip ability, a 2/1 with lifelink is not bad at all to hit.
Outside of Standard, Hidden Dragonslayer hasn't seen much play in EDH or anywhere else for that matter. However, Hidden Dragonslayer has seen some play in Cube as an efficient creature that can also serve as creature removal. While it's not a top pick in most Cubes, there is interest in it. Also, Najeela, the Blade-Blossom has occasionally included the Dragonslayer in EDH, but with so many strong Warriors to choose from, Hidden Dragonslayer is hardly an auto-include in the popular Commander deck.
Overall, Hidden Dragonslayer was a very good card in Standard. While it's still a decent card on paper, the Dragonslayer simply hasn't found another consistent home.