A friend of mine, a diamond master Yi player, recently told me how deadly thornmail is to master Yi. If two takes take it, he can no longer penta kill. rip
Anyway... thornmail's damage is supposed to make that lifesteal on ADCs less effective. But mostly, I think the large amount of base armor it gives for such a low price is it's primary use. I like thornmail's passive, but I rarely buy it for primarily its passive.
I think the only thing thornmail might need is a slight buff to the damage on its passive, and maybe have it give us 120 armor instead. Frozen Heart gives 90 (used to be 100), but it also gives us CDR, mana, and the AS slow passive. That AS slow probably weakens people attacking you, including on hit champions, more than thornmail. It's more expensive, but as the game gets to the late stages, it's probably more efficient in your item slot.
I like thornmail's cost effectiveness. I can purchase thornmail, zzrot, then banshee's and SV or Maw of Mal against a magic damage comp (still has an ADC), mr boots of course. Although, frozen heart would be more useful more than likely, you'd still rather have health...
Dead man's plate is so powerful because of that, it gives movespeed, armor, and health. Health protects you from everything, including true damage. Thornmail has never seemed as bad as people are saying it is. When the situation calls for frozen heart and thornmail because the enemy team has 4 AD champs... then it will shine. Like most items, everything is situational.