Woodhead averaged 4.5 receptions, 63 YFS, and ~0.5 TDs per game over the past 4 seasons. He averaged 3.9 ypc over that span and is understood to be poor at pass protection. So it doesn't seem like he was signed to carry the ball a lot (but presumably enough to keep the defense honest when he is in) or to pass protect. What does that leave? Catching passes.
As for his age/health, all reports are that his rehab is ahead of schedule. I know that is common at this stage, but better than reports to the contrary. Most importantly, for the Ravens to sign him, they must have checked out his knee and felt good about it. Aside from that, IMO it isn't appropriate to think of Woodhead as fitting the pattern of most RBs. He has played 93 career games in the league, already a long career for a RB, but he has only averaged 5.4 carries per game. So he hasn't taken the level of punishment most RBs take.
Most importantly, I think a lot of people fail to appreciate what a unique talent Woodhead is. He is like the RB equivalent of Welker and Edelman. Not just because they are all white, but because of his ability to get open on short routes and convert first downs. He is a very difficult matchup for a LB.
If Woodhead stays healthy, I would expect his floor to be 40 receptions, 40 carries, 500 YFS, and 4 TDs. Obviously if that is his floor, that implies he could outperform that. Sure, the Ravens could have potentially drafted a RB early who would have done more. But I don't see how anyone thinks that will not impact Dixon.
ETA: I am a Dixon owner and do not own Woodhead in any dynasty league. So I would like to be wrong.