D3 melta shots is mediocre. A scion command squad or dominion squad with plain 4 melta shots are more threatening. Knight codex may give a stratagem or may not, but free rerolls from commander units are always better. AdMech give rerolls only to AM units, while Knights are Questor Mechanicus. They can benefit from Canticles for CP if Priest is in 12, but taking another Admech detachment just for Knights isn't worth it. It's better to play AdMech then. And 3+ withour rerolls is not fine. My SR near GMNDK tends to make 3 wounds out of 6 shots with AV weapons (twin las, twin melta, twin stormstrike). From 3 shots 1 fails to hit, another fails to wound. And this is if you roll 3 for number of shots (5+). D3 shots is the worst thing about his lance. To tell the truth, if they gave him gattling cannon, it would be a great chaff cleaner. I wish, they give them something like 12 shots, 5/-1/1, when his own kit is out.
As for cost, his sword is already a bad sign. You have to pay for it, but he could never use it because he'll die t2 from lascannon storm, because no one wants a knight in his deployment. His sword good against something big, but such things are either screened (tanks) or charge first and kill armiger himself (daemon princes). Oh, he cannot even kill a scout squad in a combat phase. And, unlike NDK, he cannot be gated to be set free without penalties of retreating.
Compating to VenDreads - they are more killy. Significantly more killy. 3 shots from t1 on 2+ with rerolls against d3 shots on 3+ with no rerolls. Yes, they are a bit less durable (no invuln and 4 less wounds) but they do not degenerate. Unlike other vehicles, it is not to hard to give him cover. GK can hide him behind LoS, making him extra hard to kill without melta-drops.
Armigers are ok for friendly games. If they are extracheap, they could be decent distraction. But as unit killers, VenDreads are infinitely better.
And it is no matter, how good opponents screen, it is limited to his deployment zone (unless for scout or rangers). But still you will be closer after teleport strike to enemy lines than after movement, except flyers. Even if deployment zone is 100% screened with no way of dropping in (which requires A LOT of models). Teleport strike is equals 24-9=15" movement with shooting and charging allowed. It also protects unit in reserves until your first turn.