He was UK Champion for 600 + days, he's not going to jump right into the title picture in NXT. He's still relevant, if Cole is still champion after he's done with Ciampa & Balor then expect Dunne to challenge him.
He's an excellent wrestler and was worthy of the NXT Uk belt, maybe not for as long as it was, but worthy nonetheless. I don't think he has a whole lot of character or promo ability to be the top guy though. Especially with people like Cole, Ciampa and Balor all floating about