I disagree with speed being the biggest problem with his Dair. I mean, it IS an issue, but it's nothing compared with the fact that he lost the full actives on the attack, but retained the tiny hitbox. Nobody else with a "charge" Dair spike has hitboxes that ridicuously tiny AND actives that pathetic. Captian Falcon doesn't really have to aim his Dair in Smash 4....he just has to be near you. It's easier for the attack to strike the hurtbox of the opponent in every way. Same for Gannon, same for Yoshi.
The full actives? In Melee, if you were not playing the PAL version, Falco's Dair spiked from frames 5-24. That's 20 active spike frames. Yes, there was a late hit, but it was essentially Zelda's Dair, but ramped up... Oh, and let's not forget because of a programming error, it was not considered a spike by the game i.e. if you get Daired by Falco, you could not tech it at all. Even in the PAL version, it had 10 active frames for the clean, spike hit while the other 10 was a late hit that sent people at a 361 degree. No character in Smash 4 has a clean spike lasting that long - not counting Falco Phantasm since we don't know how long Falco Phantasm travels in frames. The closest that I can think off of the top of my head is Rosalina's which stays out for 5 frames. Zelda's late spike stays out for 10 frames, but it's a much, much weaker spike; hers does 5% or 4% and with pitiful knockback while Melee Falco's late Dair does 9% and even if it had the same knockback which it probably doesn't, it would be almost twice as strong as Zelda's.
Brawl Falco's Dair spiked on frame 5-7, 3 active frames, and had a late hit from 8-21, 14 active frames. The spike only did 10% and the late hit did 8%. When you think about it... Brawl Falco's Dair was heading in the right direction for a Dair that wasn't horribly broken like in Melee. It just screwed up in one thing: startup. If it was frame say, 11 or even 8, Falco would no doubt have that spike in Smash 4. Maybe it would be weaker like the spike only does 8% while the late hit does 6%, but guess what? A frame 11 spike like that? He could totally use that to setup vertical followups if you assume that Falco's Dair would end up not spiking grounded opponents. Why? Speed. Why do you think Cloud and Villager's Dairs are so usable compared to Falco and Link's Dairs, other high active frame spike Dairs? Why do you think Ryu can Nair to Dair so easily? Speed. If you don't have speed, then you need a good hitbox which for Falco, he does not have that since his Dair hitbox is below him rather than almost central like Cloud, Link, and Villager or how Ryu's is forward making it pretty much a 2 from Nair's 1.
Oh, and finally, his Dair in Smash 4 now has more 1 more active spike frame than in Brawl making it the middle in terms of spike frames, below Melee and above Brawl. It has lower total active frames, but it's still pretty high at 15 active frames to Melee's 20 and Brawl's 17.
Edit: Forgot about this; Diddy and Roy comes to mind as characters with a small hitbox and short active frames on their Dair. Diddy only has 1 active on a frame 17 Dair while Roy's strong hits at the base basically halves whatever range his Dair has.
The closest Dair i can compare Falco's to now is honestly Mario's...but again, Mario's hitbox is larger, and he doesn't have nearly as hard a time recovering as Falco does if his edgeguard attempt goes sour. This is the same problem with Phantasm as a spike move. It leaves you too vulnerable if you miss or screw up. Falco falls way too fast and his recovery is way too poor.
What? Mario's Dair isn't a spike? Why is that even a comparison? Closest Dair to Falco's in terms of how it works for me would be Cloud's, but in terms of hitbox, it would be Luigi's.
Smash 4 Falco Phantasm does leave you vulnerable and it is a weak spike, but think of it from a game design standpoint and you will understand why this move is inherently a bad and almost impossible move to balance. Melee's was really good when you consider its full hitbox while Brawl's had I-frames, moved faster, had less recovery, and it was frame 16 on startup instead of 18. The fact it's a spike line is insane for FFA and even 1v1 when you know where Falco is all the time. This is why I felt like, knowing Wolf isn't returning, Falco should have been given Wolf Flash. Not just because of reusing assets, but game design-wise, Wolf Flash is an easier move to balance and it spiking still keeps the idea that Falco's Side Special spikes while Fox's doesn't.
As for Falco and getting overnerfed, yeah, the "slingshot nerf" is a pretty common issue with balance. they could have kept his laser autocancels and tweaked their balance in all sorts of ways. They could have lowered the hitbox size, they could have removed the hitstun with range falloff limiting his ability to zone with them, they could have given them a recharge period like with Robin's specials. Instead, they nerfed the range, they gave the attack cooldown frames so massive that you can get punished for shooting someone half a stage away...it's silly.
Yes, they could have done something else, but you can say that for any other character. Some of the changes you suggested... lowering the hitbox wouldn't really do much when it's already a low-ish hitbox unless you mean make it fire a bolt like Wolf's... Removing the hit stun at a certain range shouldn't be on just Falco - hello there, Sheik. A recharge period was actually considered for in Brawl, but unlike an actual cooldown, they were figuring Falco, Fox, and maybe Wolf's Blaster should short-out sort of like how Diddy's Peanut Popgun would explode if held too long... Problem is that they don't fire their Blaster continuously; most people fire off 1 to 3 shots before doing something else. It would have been a pointless mechanic especially given there was no charge that did anything which for Diddy, altered the angle his peanut traveled.
Any projectile having auto-cancel windows, in my opinion, is bad for both the character and other characters. Why? Look at Falco's Blaster and tell me why. Look at all of his Blasters in each game. They never added any total frames; it was always there; Falco always had 58-ish total frames on the ground and 49-ish total frames in the air. The difference? Melee Falco's ground Blaster first shot came out double the time of Brawl and Smash 4's. It was frame 23 to Brawl's 12 and Smash 4's 11. Recovery-wise, that makes it have 35 recovery frames. It was basically a Sonic Boom or post 1.1.1 Greninja Water Shuriken; high startup and low recovery. What went wrong? Think about it before moving to the next paragraph.
Brawl increased the range to the point where from one end of Final Destination, his laser would still travel past the other end. I don't remember Melee and I don't own it anymore, but I'm pretty damn sure Falco's lasers did not travel past Final Destination from one end. That was utterly insane and damningly stupid. Brawl also decreased startup and increased the rate of fire and travel speed - note how total frames was not changed at all - allowing Falco to fire out 2 lasers from a hop and it'll reach you almost at Fox's no hit stun laser's speed. Tell me, just tell me if you think any of this was fair. It. Was. Not. Even if you had fantastic reflexes, you would have trouble trying to deal with his lasers. For a regular player who's just having fun? It would be utter hell. Brawl Falco was probably the most hated character for both sides.
So, what's this got to do with auto-canceling? Auto-canceling was an ugly, lazily put on band-aid. As I learned more and more about frame data, I realized that Melee Falco's Blaster is what Smash 4 Falco should have. Why? Let's look at the recovery frames for Brawl and Smash 4. In Brawl, Falco's Blaster took 45 frames on the ground and 32 in the air to recover from having 12 frames of startup and 56 total frames on the ground and 10 frames of startup in the air and 41 total frames in the air. Safe to say that ground recovery didn't matter most of the time. In Smash 4, it took 48 frames on the ground and 41 in the air from 11 frames of startup and 58 total frames on the ground and 9 frames of startup and 49 total frames in the air. Melee's ground was covered at 35 frames and in the air, it takes 30 frames to recover from 13 frames of startup and 42 total frames, but like Brawl, ground recovery never meant anything... Or did it? In context to Smash 4, yes, yes, it does. Now, I think Falco should be given his Melee Blaster frame data minus the auto-cancel windows of course. Melee had the most balanced Falco Blaster outside of its auto-cancel windows which were "necessary" for Falco to compete in a game with much more... "faster"? movement.
And about his Uair...it's not that it's a bad move, it's just that there's no reason for it to be weaker than, say Cfalcon or ZSS's. No reason at all. Not when Sheik has none of these issues, zones better, fights better, recovers better and will easily take your stock with an Uair that is chocked full of active frames.
Yes, there is a reason why it's weaker. Hell, there's even a reason why ZSS's Uair is weak. I'll give you a hint: jump height. Oh, but Sheik jumps just as high. Like Fox and Greninja, Sheik's Uair isn't really meant for continuous juggling like Captain Falcon, Falco, Kirby, Luigi, (Dr.) Mario, Meta Knight, or ZSS's. Theirs are more like hit and chase for a juggle or outright killing - you don't outright kill with the Capt., Falco, or ZSS's Uairs. Here's the problem, Falco lacks any finishers other than Bair, but he needs to hit with the back part of his Uair which is unique since his and Bayonetta's - looks like it from what the trailer showed - Uair hits back then front. ZSS on the other hand has access to Bair and Boost Kick with Boost Kick's insane growth letting her kill so early coupled with something else... Falco's Uair is a bit too strong while ZSS's is a bit too weak... What? Really, it's true. Falco's does 10% and low knockback. By mid percents, he won't be able to land 2 Uairs - hell, he can't land 2 Uairs even in low percents at times. ZSS? She can with her 8% and high knockback. ZSS hits weak enough, but with enough hit stun to move you up and prepare you for a kill; Falco hits hard enough where he'll send you out too far for him to follow up because of his Uair and his low air speed. The same reason goes to why Mario and Meta Knight can continually Uair people so easily while Captain Falcon, Dr. Mario, and Luigi lose that past mid percents or so.
The developers knew since Melee that Falco can easily boot you past the blast zone purely because of his fast double jump. First thing notable about him was his Uair was much weaker than Fox's. So instead, they made him kill horizontally more easily - Side Smash and Bair - than vertically like Fox - Up Smash and Uair. Granted, he had his Dair in Melee, but you do realize what would happen if Falco had a Fox, Ganondorf, or Yoshi Uair right? Say "sorry" to pre-patch Diddy, everyone, because there's an even bigger scumbag to deal with now.
Falco just lacks potent tools. Like every other midtier character, but his faults are way more visible because he has fallen so far since Melee/Brawl.
Falco doesn't lack potent tools... Mid-tiers don't lack potent tools; low-tiers do. Low-tiers are disadvantaged because they have so little to work with while mid-tiers have things to work with, but none of them are as powerful as high-tiers. Outside of his Blaster and Fire Fox, none of Falco's moves, including Dair, are below average. It's his issue with zoning and mobility (and shared physics with Fox) that bites him back.