Eh, he's fine.
Kidding, kidding. :P
Morghoul 3 has a "best of" combination of Morghoul 1 and 2 abilities: Pathfinder, Stealth, Parry, and Steady. He also has Acrobatics, and gives his unit Reposition 3. Mercy lost Weapon Master, but gained Critical Decapitation, and Morghoul has an extra damage die against models suffering Blind. This is all mostly good stuff, and (along with his standard statline) makes Morghoul a competent assassin who can get around the battlefield pretty well.
His spell list is also mostly good. Flashing Blade isn't quite as flashy now that Morghoul lacks Weapon Master, but Mirage is good, and Night's Reflection and Occultation are both excellent. Night's Reflection is great denial against infantry, and a solid offensive tool even against things that can shake it. Occultation is hilarious. Delivering Nihilators just became possible, and I think Stealth will take Ferox from strong to nightmarish against many lists.
Morghoul's Feat is strong overall (and another reason to take Nihilators). Warrior models in his army gain Acrobatics, Overtake, and Parry. Seems pretty simple, but it lets you clear out infantry very well, and lets you run fast troops into some very interesting positions. It also lets Morghoul and the Escorts present a very nasty and reliable assassination threat with a maximum potential threat range of 12-13 inches.
Morghoul's bodyguards are... there I guess. They're as fast and stealthy as he is, but lack Parry or Acrobatics outside the Feat turn. They do have Fans of Shadows, which means they can put Blind on something if Morghoul doesn't want to spend 3-4 Fury on it. Otherwise, they don't do anything especially interesting, and I don't like the models. I'd rather have more Warbeast points to be honest.
Morghoul 3 looks pretty strong. He has a clear game plan, and good tools to execute it. His Feat and spells work very well with warrior models, so I think plenty of melee warriors are a good idea. Night's Reflection is a fantastic accuracy buff for ranged models, so I like a gun-focused battlegroup with Morghoul 3. Whether he fits into a competitive pairing or not depends a lot on playstyle. Both Morghoul 3 and Morghoul 2 support strong assassination plans. If you really like the idea of having a lot of warrior models help you set up that assassination (or just go in and blend opposing infantry and support), then Morghoul 3 seems solid. We definitely have some warrior models that benefit hugely from his kit. Morghoul 2 has more versatility in terms of which models he can deliver (thanks to Shadow Play), and is a nastier threat himself with Blind on his fan and Weapon Master on Mercy. (Disclaimer - I don't really play Morghoul 2, but I don't think I'm missing anything huge here).
Here's what I'm going to try first with Morghoul 3:
Dominar Morghoul and Escorts (*25pts)
*Titan Cannoneer (17pts)
*Titan Cannoneer (17pts)
*Cyclops Shaman (8pts)
*Aptimus Marketh (5pts)
Extoller Soulward (3pts)
Praetorian Ferox (Leader and 4 Grunts) (20pts)
Nihilators (Leader and 9 Grunts) (15pts)
The Legends of Halaak (Valgesh, Cidaar, and J'Deth) (8pts)
Paingiver Beast Handlers (Leader and 5 Grunts) (7pts)
Here I'm trying to combine the melee threat of good infantry with some support from the ranged battlegroup. There is a lot of hitting power in the units. The Ferox and Legends can take on all kinds of targets, while the Nihilators will mostly focus on opposing infantry. On the Feat turn, everything I have will sprint into enemy lines to jam or possibly assassinate. The Cannoneers will give me some flexibility in how I engage, snipe out key threats, and give me a little bit of a ranged attrition game. Basic plan is to get things up the table as intact as possible, Feat, and throw the units into the middle of the opponent's army. I'll try to assassinate if I can, but a careful opponent will probably be able to keep their 'caster safe.