I'd be more excited if it were not hit by Misstep; Grafdigger's cage is still better in most situations. (especially against blue)
So you'd be more excited if this cost 0? Wouldn't we all? But that's clearly too good of a card to print. Perhaps you'd prefer to double the casting cost to 2? I disagree that the cage is better in most situations. The fact that it's a 2/1 for 1 mana makes it good in just about any matchup regardless of how effective the disruption is. Playing v. Espresso Stax which has no instants or sorceries? You still put a 2/1 for one mana on the board. Cage, on the other hand, would be little more than the something to tap to Tangle Wire/sacrifice to Smokestack in the same scenario. Cage is also dead against Landstill where this card gets down before they can drop their Standstill and may force them to delay doing so. There's also the fact that against blue, when they Hurkyl's your Cage all the goodies they've cast over the course of the game are still sitting right there in the graveyard. Bounce/Kill Dryad and that Ancestral still ain't coming back, I don't care what Tiago and Yawgmoth say.
This card gets worse later in the game* and does not stop Tinker>bot/ Oath.
This is, of course, still valid as both cards are realistic and serious problems for G/W creature based decks. The question I think we are left with is does the added strength in these situations outweigh the improvements in other areas that the Dryad has that I've pointed out? The answer is probably a function of what you expect to face. If your whole metagame is Oath and Dredge then Cage is probably preferable. A more diverse metagame with Shops and Landstill in addition to Dredge, Oath and Blue and I think the Dryad is the better hedge.
Doesn't even do a great job at fighting Delver. (doesn't help that you can't block the flying Insectile once transformed)
I mean, what creature does do a great job of fighting Delver in this format? Griselbrand? You can probably race them given the other creatures in your deck. I guess if he was a 2/2 you could attack through an unflipped Delver, but again, it's a 1cc spell, let's keep our expectations reasonable.
Cards most likely/relevant to be Willed/ reccured back that Dryad Militant can't exile:
Black lotus
Time vault
Voltaic key
Engineered Explosives
Baleful strix
Dredge Creatures/ Ichorid/bloodghast
Lotus matters, but without anything juicy in the yard to recast with that mana I question it's effectiveness. It's not even like you can play it out hoping to net some mana by chaining it with some Rituals to cast that Bargain in your hand or whatever. I guess if you can replay Vault/Key and activate key the same turn after playing Will and I have no way to disrupt the combo then you win the prize. I'm not sure Baleful Strix has enough impact or is prevalent enough that I should be really concerned about it. I guess EE is a thing and can have an impact depending on the board state, but I'm not sure it's a huge concern. The Dredge creatures obviously matter, as I noted above.