Recent form? He's been absolutely fantastic all season. And as for the "has to play against the best"-part:
Does Pique and Puyol play against the best all the time? Facing "Sergio Sucky", "Javier Nobody" and "Hugo Tapas" from La Liga?
Yeah, they play in the CL, but we've played the likes of AC Milan, Napoli, Lazio and Inter this season, teams that if you look at the players they have at their disposal, some of them are of CL-quality. And Barzagli has absolutely crushed every single attacking player he's been up against, whether it was Zlatan, Robinho, Cavani, Hamsik, Sneijder, Milito (someone who actually decided a CL-final some time back) etc.
It's easy to pull the "we're not in the CL so he can't possibly be judged yet"-card, but just have a look at how he's playing. Incredible.