T4 and no saves with Fly, 3 wounds and a single vargheist can munch an entire Warmachine? so you have wounds to spare before a minimum-sized unit is lost?
well yeah!
Let us be clear on something:
An army that has THAT many shooting (2 Organ guns, 1-2 Units of Irondrakes, 1-2 engineers plus... what, 1 Unit of Crossbow/rifle-dwarves [forgot their names] and maybe 1-2 cannons to shoot at Terrogheists?) becomes less useful after turn 2/3 depending on your setup.
Those are a whole lot of points to spend on shooting attacks (hence the term "gunline" I suppose). So all you have to do is reach them and they will die in 1-2 turns. Vagheists here are to be the main menace, so all shots can be directed at them, but once you make 2 march moves with... say, Skeletons? Zombies? grave Guard or Crypt Horrors, the battle is yours, on your therms and shooty dudes can't handle a min-sized Zombie unit. Hell not even one spawned by Raise Dead (which IS your best ally against any gunline).
As I said, Vargheists can loose 8 wounds and still reach a Warmachine and stomp on it (maybe not Elven... because of ASF and higher Ini) but elves don't have the capacity to melt down 2 9-wound Unit in 1 turn with shooting AND just letting the Terrorgheist roam free to slaughter every Phoenix they encounter, for instance.
So, Vargheists ARE that good. They know once the big winged bastards get to their flanks / warmachine they are no longer a glass cannon anymore. Flank charges with those guys hurt!!
Last, I don't support playing just "open terrain so you can see everything" kinda games. Always go for random terrain / scenery. Towers, walls, fences, forests should be included in every game! Also hills and such. That wouldn't be very realistic / fair if you just play on a plain table. If you really need to deploy a building / obstacle, go for the Garden of Morr!!
Vargheists + obstacles or Dire Wolves are guaranteed to at least make a charge and start munching stuff!