Zephrys is not only played in highlander deck.. Think of it as an later Elise, you get the value later in game. It's worse than Elise in term of tempo, she was 5/5 for 5 at least and you still get the value.
Potentially Meta defining, as this card alone would be the reason to spawn a new Paladin decktype (including just classcards) but is this card on its own good enough so Paly could afford to miss out on such a huge pool of cards ?
... Maybe. Using this in a mid-range shell as a card advantage machine and cutting Lay on Hands from the list could work. Emphasis on could. It is possible to build a Midrange Paladin list using only class cards that won't fold over instantly. However, Midrange Paladin is a deck that grinds out wins with value and board control. If the meta has a control deck that can't lose late no matter what (some kind of control Priest, or the next Jade Druid), then I don't think it will have a home, especially since Control Warrior exists to dump on aggro.
That being said, if Control Warrior becomes a Tier-1 deck because there's a lot of aggro out there, then Mid-range Paladin becomes about 5 times more viable since Control Warrior has historically been its best match-up by a country mile. Lot of ifs. That minion that obliterates dragon decks will be incredibly hard to deal with, so I'm not sure. Will have to be tested in the field. Call me cautiously optimistic!