Harden is not that bad of a defender. It's just there is no accountability on the defensive end of the floor in Houston. McHale doesn't do his job. Lets Harden away with anything. And so his defense has dropped off badly as Harden conserves his energy for offense.
Put Harden on a different team or give him a head coach who will actually hold his players accountable and Harden will be a fine middle of the pack defensive player.