The TV Piper is neither a meta with uncontrolled powers, or a career criminal. His motivation revolved around Wells hiding that he knew about the Accelerator explosion. And once Wells announced his involvement with the Accelerator explosion, he moved on to his only other leverage, attacking the only other thing Well's cares about, Barry/The Flash. He lost, and knows that he won't be able to beat him in the future, a chess metaphor.
He then uses Cisco by baiting knowledge on Ronnie to escape. Cisco releases him from the makeshift prison, and takes him to Barry's Lab at the police department, where he makes good on his info, but then escapes.
Unlike Captain Cold and Heat Wave, who make the news often as career criminals out for a buck (with the Flash's "Do Not Kill" consent), Rathaway's only motivation is Wells. With Flash around, he can't get to him, so he stays away.
But once Wells dies, his entire motivation for crime/vengeance is gone. He has no reason to come back. He's a minor secondary villain that would not make sense to write back in.
Update: The previews for the Season 2 episode 17 to be aired on 3/29 shows that Rathaway may be back, either in present time or in a flashback, or via time travel shenanigans. Maybe they will explain his absence in the last year. The episode title being "Flash Back" means likely not.
Update 2: Spoiler Alert
Rathaway had new lines in the past, and the show pulled a major retcon courtesy of Time Travel Shenanigans. Rathaway is no longer evil, or gone. An undisclosed amount of changes have happened, but Hartley's little project line implies he's not a regular member of Team Scooby Flash.
