kira Asahara turned heads at Worlds 2010 with his Faeries/Polymorph mashup. Smaland decided to bring it back, although it was before Bitterblossom was even unbanned!
In the grand scheme of things, I like Proteus Staff as a reusable Polymorph effect over the one-shot spell. It's more mana overall, but it's easier to drop a Staff on turn three and use it on turn four, either with counterspell backup or a discard spell for protection. If things go wrong, you're free to try again on the next turn.
Isochron Scepter provides a reasonable backup strategy for stalling with either Boomerang or Vapor Snag and is another artifact to discard to Thirst for Knowledge. Ashiok is yet another backup plan, capable of providing food for Proteus Staff or even an alternative win condition if you can steal an opponent's Tarmogoyf.
Overall, I think Proteus Staff has what it takes to be a contender in Modern, barring an abundance of artifact hate. Eight discard spells and a quick kill should be great against the plethora of combo decks. Plus there's a lot of resiliency in the deck, especially after you add some Bitterblossoms.
Smaland's Proteus Staff
Gerry Thompson is a former professional Magic player and strategy writer, whose career highlights includes a Top 8 at Pro Tour Gatecrash and two Grand Prix wins in Denver and Nashville. He's currently a development intern for Wizards of the Coast.