They're fine, I think. The idea is that they're a deck that's capable of powering out fast undertaker starts, but is a little slower and has more powerful cards than the hunter deck. I think you can build it to beat hunter, which is a good feature of every deck. And it's tons of fun to play.
I think the main reason they're not seen much is that hunter and zoo are just better. If you're going to play an undertaker deck, shouldn't you just play the best one? Hunter is significantly more powerful at ending the game quickly against control decks, while priest can't end nearly as quickly and will struggle against decks like Priest, Druid, and Warrior in the late game, and doesn't have hunter's hero power to make handlock a good matchup or provide finishing power in general. If you're going to be an aggro deck that's playing one drops, you'd much rather have a power that does two damage. You also don't have the warlock hero power to run a zoo plan as effectively as warlock does. So you end up in a weird mash of Hunter and Zoo, and that makes you much worse against slow decks.
There should probably be shadow word deaths in that deck.. I forgot to put them in.