He probably wouldnt be able to hang with Anderson, Okami, Belfort, or even Marquardt but he would definitely be competitive against the mid tier guys like Rivera, Bisping, Maia, Grove, etc. He also brings in more of a personality which would help the UFC in ppv's. And it would take away one of SF's better known fighters so it would be a win/win for the UFC. I'm just not sure that the UFC would be willing to pay what Mayhem would charge.
Either way it would be a decent signing for the UFC but if they dont get him it's not a huge lose.