Well, first, Gempalm Incinerator is a poor example because you came up with your own reasoning. So here's the closest you can get to comparison between MtG and Brawl:
M10 ruleset is Brawl.
Modern is our current tournament ruleset. The banned sets are equivalent to banned items. Specifically banned cards are equivalent to banned stages and/or characters.
Standard is Mid Tiers. Nobody likes Mid Tiers.
Legacy is All Brawl. Again, specifically banned cards are equivalent to stages/characters that are banned anyway.
Vintage is Brawl-/Brawl+/Project M. It's not relevant to most of the world, but people still play it anyway because having an insane number of absolutely broken options is fun for the novelty. Maybe even viable for a tournament format.
In the end: Gempalm Incinerator is like a Cracker Launcher. Sure, it might be overpowered, but that's not why it's banned. It's banned because, like the rest of its set, it's not a Modern Border printed card. Cracker Launcher might be overpowered, but it's actually banned because all items are banned.
Meta Knight is, potentially, the Umezawa's Jitte of Brawl. Hell, the current sentiment of "only Meta Knight can beat Meta Knight" is almost perfectly reflected in how many decks ran Jitte specifically to combat opposing Jitte through the Legendary rule.