Treebeard is amazing. The ultimate Ent ally. He is for the Ent trait what Radagast should have been for the Eagle trait, but here they made it work so instead of an ally who can work in the specific context of a certain trait-based deck if you preferably cheat him into play for cheap you have an ally whose primary role is to support a trait (which unlike Radagast he belongs to himself as well) but who is not just worth the cost but actually one of the best unique allies in the game even outside of that particular deck type.
Let's explore this in a bit more detail. Of course Treebeard enters play exhausted, like all Ents. That's his only real downside - he also can't have restricted attachments, but it's pretty rare that one puts restricted attachments on allies in any case. His beneficial abilities are of course the Ent equivalent of Radagast's abilities - he generates resources which can pay for Ents just as Radagast does for Eagles, and if you don't have Ents to pay for then he can use those resources instead to ready the ones you already have. But as noted, the consistent issue across the whole trait is entering play exhausted, so that means Treebeard can potentially negate the downside of these otherwise very powerful allies. That he is very rarely used for this purpose indicates that alternatives are even more powerful, which I think is saying something when you put the comparison like this. (By contrast, Radagast's healing didn't have the same potency and synergy because taking damage was never really an issue for Eagles). Most likely though you use his resources to pay for other Ent cards (it's worth noting here that Ent Draught and Boomed and Trumpeted both have the Ent trait and so Treebeard can pay for them as well as for the allies).
So by that logic, in 4 rounds he'll recoup his own cost. Unless you have some form of resource generation or cost reduction to draw on, you can't play him until round 2 at the earliest, and running at a net loss until 5 rounds into the game doesn't sound like such a great deal, does it? This is the same reason Radagast isn't particularly well thought of. And if Treebeard's stats were as lacklustre as Radagast's then he might have been received in a similar fashion, but they're not. I'm pretty sure the only allies in the game who have more stats than Treebeard are Gandalf, Gandalf and Saruman. Ally Treebeard has one more stat point than his hero version, putting him on a par with hero Gandalf. The approximate rule of thumb for ally costing is that a lot of allies seem to cost half their sum of stats, by which logic ally Treebeard should cost 7 resources. OK, he enters play exhausted, but is that single round of not using him really equivalent to the value of 3 resources? I would say no, he's a ridiculously good deal, and then he generates his own resources to help you play more Ents, or ready them.
2 is decent, but it's the combat stats which really get you your money's worth here. 3 and 5 make Treebeard one of the solidest defensive allies in the game - it could even be argued the solidest, with the only reason he isn't used more in that capacity being that he also has 4 , which at the time of his release was completely unprecedented. Hero Beorn had 5, but he was rather a special case being immune to player card effects, and other than that no character, hero or ally, had a printed value higher than 3. Even now the only other is fellow Ent Skinbark. Treebeard, on top of being hilariously good value, was also breaking new ground in terms of ally power level - scratch that, character power level.
The final point of note is of course his readying ability, which I've hitherto mostly passed over. The best target for that readying is almost always Treebeard himself - and this is the final piece of the explanation for why Treebeard is a ridiculously good ally to have even without any other Ents. The only real exceptions are when Treebeard is already ready and you need more Ents up to attack together, or a Booming Ent when you've got a bunch of damage around, again for high purposes. Or, it should of course be noted that the ability does not specify an Ent that you control, just an Ent, so if your fellow players are also using Ents you can ready one of theirs, which may be helpful since Treebeard's many good qualities admittedly do not include a Ranged or Sentinel keyword. In general though, just have him ready himself whenever you need it - and when you don't just stack up those resources for later use if you don't have other Ent cards to pay for.
When last year PsychoRocka ran a Unique Ally Championship on the forums, Treebeard came second, having been the only really credible opposition to Arwen. Since then, we've seen the release of hero Arwen, and as a result the ally sees a lot less play and we've all gotten used to doing without her. With that in mind, I think a serious case could be made for Treebeard being now the best unique ally in the game. Ridiculous statline that puts most heroes to shame, resource generation in the right deck, (mostly self-)readying, and of course he's neutral and can thus go in literally any deck. Central to the functioning of an Ent deck, but still one of the best options for pretty much any other deck as well. However you may feel about the Arwen comparison, there are certainly very few allies that can even hold a candle to Treebeard.