Caravan Guard is quite inelegant, and also kind of boring. It seems so obvious to me that the card shouldn't have +action; you could load a lot more power on the rest of the card, it's a lot more exciting to use as a reaction, and you don't get the ugly explanatory text. So I wonder if it was tested and just doesn't work for some reason.
It wasn't. Caravan Guard was always like that, except it initially cost $4 very briefly. Without +1 Action, there certainly would be a much larger power differential between playing it during your turn and playing it as a reaction. Maybe a big enough differential that it would always be either too weak during your turn (and in games without Attacks) or too strong as a reaction.
Anyway I think a lot of you are being too hard on Caravan Guard. Against many attacks it's actually significantly better than Peddler.
It's best against Militia attacks. Say you have a hand of [Gold, Silver, Caravan Guard, Caravan Guard, Province]. If those Caravan Guards were Peddlers, you'd have to decide whether to discard one of them or a Treasure card. But since they're Caravan Guards, you can play them and you may very well draw another junk card to discard instead.
It's similarly good against Spy attacks. Say the only Action cards you have in hand are Caravan Guards and Villages, but you have a shot at drawing a Smithy. Unlike Peddlers, Caravan Guard lets you draw
before that Rabble engine mucks with the top of your deck.
Against Knight-style attacks it's mostly a wash; you might draw good cards into your hand and thereby keep them safe, but you also might draw bad cards and expose good ones to the attack. It's really only good if the attacks are so numerous that they're actually getting through your whole deck. Against Witch attacks, Caravan Guard may allow you to trigger a reshuffle and put off seeing that Curse for a while. That's a small benefit, but I'm trying to be thorough here.
Of course there are some attacks where it can hurt you (against Taxman and Cutpurse it might draw you Treasures to discard), but those are pretty rare I think.