I think it depends on the situation. I could see this item being really good on a drain tank like Warwick, along with FF.
It's better than lifesteal in that scenario, because lifesteal scales with your damage output where this is flat. It's like how the Doran's blade change to lifesteal from life on hit actually decreased its lvl 1 sustain.
Regardless, I don't think this should become an item, because I can't really imagine anybody except WW building this item, and I think items should introduce diversity; if there's an item that only one champ ever builds, and that champ always builds it, why not remove the item and tweak the champ's kit to compensate?
Just because I don't think it should be introduced, doesn't mean I won't help to work on it, though. It's a cool idea.