Yeah his fitness is a big concern. But I still think he should be batting a bit higher. He is not a powerful slogger, but he is a street smart batsman who is good at finding gaps. He will be of much more use at no 4. He has done more than Rayudu's to warrant that spot.
Also this can solve our MO crisis as Karthik and Pandya at 6 and 7 are decent finishers.
Not sure if he will be around after WC. If he is, he will bat at 5.