Its a pretty pointless passive. It's in the same boat as things like the old Kassadin Passive or even Wukong's passive. They're products of their era, when passives were a bit more of an afterthought than a major part of a champions kit.
Fizz's passive is actually incredibly powerful against certain champion matchups, in such a way thats really difficult to quantify. It often goes unnoticed, but this ability will often let you stay in lane way longer than you realistically should be able to. Its most apparent versus mages like Xerath or Syndra, who just auto attack you for free harrass, but itll pretty often give you an extra health pot or so worth of defense. Historically, whenever Fizz is able to build tank or bruiser AD and go top, this passive has been one of the most annoying things to deal with because of how it affects damage calculations.
Here's how Fizz's passive factors into damage taken:
In this example, lets say Fizz's passive is reducing damage by 5 and he has 25 armor, for 20% reduction, and is getting hit by an Auto Attack for 50 damage. (these aren't exactly clean numbers, or really accurate to how it'll work in the game, but its just for the sake of making the math easier to digest)
That 50 damage would be cut first by 5, down to 45, before the 20% reduction would be applied, resulting in 36 damage taken. Without fizz passive, this would be 40 damage recieved.
This adds up really fast when you consider how many times a melee champion gets auto attacked by ranged champions. Its a really boring passive honestly, the Ghosting is nice, but its an effect which just gets rid of the bullshit that is minion block.
The issue with giving Fizz a better passive than this really lame, invisible, hidden passive, is that Fizz's kit is already chock full with strong abilities. His E is arguably one of the most powerful basic abilities in the entire game, his ultimate is an amazing catching tool, while his Q doubles as a strong burst gap closer and a conditional escape, if need be. His W is pretty alright, tho it suffers from the same invisible power as his passive. Adding a new passive to Fizz would tip him over the edge, if it was up to the standards of modern day passives, since Fizz is hyper volatile to even small changes his kit/items recieve (as we've seen in the past when DFG got removed, his W recieved it's reworks and even the old Lich Bane nerf from years ago). Fizz is pretty much perpetually stuck in a cycle of being either insane or garbage.
Tl;dr, his passive is lame because of how riot used to design champions. He can't just recieve a new passive straight away without tweaks to the rest of his kit, otherwise he could get out of hand again.