I personally enjoy the concept behind the tiamat, but I also know why it doesn't see much play. The damage/cost ratio is actually not bad. (BF is 1650 for 45 damage, tiamat is 2050 for 50). Essentially, you're paying 400 for the splash damage and some health and mana regen for sustain, which isn't bad early game. The sad part is that the item falls off hard... the item is 2050 and has no upgrade paths (only item to pull this off in the ad realm is last whisper heh). Rush it for the early game benefits and essentially lose half a tri-force to your top lane opponent.
You do have to realize, though, in higher elo (as in above 800 lol), when last-hitting is advantageous, tiamat actually inhibits your farm. You will lose a noticeable amount of last hits to your tiamat passive. And, sometimes, you really DON'T want to push your lane.
imo for tiamat to be viable, it would need to be toggle-able (or perhaps a low cd buff). Seeing it as an item for top lane bruisers, it would really need something with some survivability and perhaps an upgrade path.
neat concept, no viability =*(