Yes, i was disappointed when Sly's level 1 got nerfed, cuz he's my main character and all, but this definitely was a good decision. i mean, Sly was the only character in the game to have a level 1 that couldnt be interrupted, and it has really good range. these two combined made his level 1 extremely overpowered, making it probably the best level 1 super in the game. Even after the recent nerf, it's still a good level 1, you've just gotta be more strategic with it.
As an avid Sly player, I must disagree with you.
The change to Sly's Level 1 was both necessary and fair. Arguably one of the best supers in the game, able to be launched with practicaly no fear into a group , almost ensuring at least one kill. Absolutley no other Level 1 in the game possessed this quality. This meant that the ratio of kills earned vs AP spent heavily favored almost unilateral use of Sly's Level 1 versus his other two supers. No other character had anywhere near the efficiency of AP-to-kills that Sly had. And this is before factoring in things like hit confirmable supers and such.
On the topic of hit confirms, Sly does in fact possess several confirms into level one, such as air v.Circle-to-Lv.1 and Counter stun-to-Lv.1. While trickier to pull off than, say, Evil Cole's hit confirm, they certainly exist, and further incentivised the use of the Lv. 1 over any of the other two.
Finally, Sly's counter was probably a tad too good in relation to the average skill level of the entire community. The only thing I can really say about that one is try to use it more strategically, and not as the universal defensive tool. Sly's lack of blocking is made up by probably the fastest run speed in the game, excellent mobility with both versions of forward Circle and up Triangle, in addition to the best invisibility in the game.
Sly's teleport was one of the few ways to completely dodge Fat Princess' Level 3. His 'counter' is still very very powerful: it teleports you automatically behind wherever the originator's hit. You could 'counter' a mine and teleport all the way across the map if the character is way over there. Not many Slys do this: but his Reversal Bomb can cripple human opponents in crucial moments (reverse + super?).
Don't forget he can still barrel hop/spam, electric roll safebounce, and do majority of his actions while invisible. Sly is LITTERALLY very sly to play against if used properly. He has a ton going for him and the nerfs he got balanced him out. That Level 1 was horrendously overpowered, especially playing in the first part of Stowaways. His counter has at least a LITTLE cooldown now, but it's still quite spammable. All they need to fix with him now is his ability to infinitely spam barrel in midair...
...and a personal one: I think she should only be able to teleport so far in the counter, like a quarter of the map instead of whatever distance.