Why doesnt anyone use peten the dark clown x3 as an engine in their deck?

The uses for it are endless.

ex1) You sacrifice 1 for a monarch, it goes to the graveyard and another one gets special summoned to be sacked next turn.

ex2) 1 in your hand, any card that would discard it like card destruction, morphing jar or deck devastation virus lets you special summon him for sack fodder.

ex3) You play any card that requires you to discard (tribute to the doomed, raigeki break, lightning vortex) especially vortex, clears their field and gives you a monster to sack for a direct attack. And when you sack him your last one comes out.

ex4) A deck thinner

I think this a very versatile card that is often overlooked.

Please post your thoughts.

The reason noone plays him is because none of your examples work. Peten has an optional trigger effect, meaning him going to the graveyard has to be the very last event to happen, otherwise he'll miss the timing to use his effect. Let's look at your scenarios and why Peten would miss the timing:

1.) If you sack him for a Monster, the last event that happens is a Monster being summoned, not Peten going to the graveyard. So Peten can't activate his effect in this case since he missed the timing.

2.) In the case of Card Destruction or Morphing Jar, the last event that happens is the drawing of new cards, not Peten going to the graveyard. Hence, no Peten effect for you. Deck Devastation Virus is the only one were it would work, since Peten going to the graveyard is indeed the last event to happen here (assuming of course that DDV is chain link 1).

3.) If you discard him for a card that requires a discard cost like Raigeki Break or Lightning Vortex, the last event that happens is the effect of these cards, not Peten going to the graveyard. So again, Peten can't activate his effect to bring out another one.

That's why people use Destiny Hero Malicious in all these situations, because his effect isn't an optional trigger, but an ignition effect and therefore, it cannot miss the timing.