. . . designed back in the 30's or 40's (Or sooner, I'm not going to look it up)
Sooner. 1852.
Airplane compasses and torpedoes used gyroscopes in WWI.
Does it belong in the steering/control systems of a model - no (IMHO). The dihedral of a trainer does the same for roll and the throttle can trim a properly balanced model for horizontal pitch. You actually need three gyroscopes to control the yaw, pitch and roll.
A gyroscope will not keep you airborne, but will resist orientation changes - even if those are needed corrections. A gyroscope initialized with the aircraft's nose pointed into the ground at a 20º angle will happily keep the model heading into the ground at a 20º angle.