I think there are a few problems for Phantom Zone villains:
1. The powers. All these kryptonian dudes have the same powers. Zod, Non and Faora get by with numbers and Zod's leadership (Zod is sort of "boss" of the Phantom Zone) and the fact they're expected to have the traditional powers (and when Zod & cia break out, its often a total break-out). The others, through, they need something either emotional/mental/physical to give them an edge, otherwise they're just another generic jerk with kryptonian super-powers. Xa-Du has an advantage/disadvantage in the form of his ecto-suit which allows him to be solid and have some other interesting abilities, as well as the Living Death, but also means Xa-Du can be defeated in other ways (and I have a feeling the other convicts don't like him either). The idea of Jax-Ur being the avatar of Vohc the Breaker might be an interesting idea.
One cool thing I would do is have one of these dudes gain Electric Superman-style Superpowers. No really, I'm surprised nobody ever thought of it. Explain it away as a thing that might happen with yellow sun-powered kryptonians, with most of them going back to normal, but a few retaining the eletromagnetic powers. No idea who to give those, through - Jax-Ur? Someone brainy seems best.
2. Being subsumed into the larger mob of kryptonian escapees. It seems every dick and jane in the phantom wants vengeance against Jor-El and his house or something. Explains why Jor-El was the one who found it, he probably could't step out of his house without being attacked by some maniac.