Ironically, making Blastoise a steel type would make it MUCH more flawed. It's UU, yeah, but that's by usage and that's no insult, if you're in UU you're a pretty good mon. The tier means exactly what it means, under used, and Mega Blastoise is definitely a top threat in the tier. Remember that the tiers in smogon are usage tiers except for the bordlines. The borderline tiers are for pokemon that are too powerful to be played in the tier below.(such as BL1 being banned from UU, but not OU by usage.)
Mega Blastoise actually does have a pretty good niche in OU, and that's being a tanky water type rapid spinner against certain pokemon that set up stealth rocks such as Landorous-T, Garchomp, and even Ferrothorn. However, making it a steel type would make it loose this niche and be destroyed by common offensive pokemon(such as the former two I mentioned, and sweepers such as the Mega Zards no longer have to worry about the fire resistance), not only that but steel type not being that good of a offensive typing anyway.(Mega Blastoise already suffers from four slot syndrome anyway.)
Really, you'd have to change it from scratch to make it that good of a pokemon. The problem is that the Mega slot is so valueable that people are always going to go for the most viable option possible. Not to mention a ton of competion from water types both in OU and UU. Such as Keldeo, Azumarill, and Starmie in OU. And Crawdaunt, Feralgatr, and Gyrados in UU.
Feralgatr being better than Gyrados nowadays anyway thanks to sheer force. If Feralgatr got a mega it'd easily be OU unless they were to screw it up, even regular Feralgatr is surprisingly viable in OU. But that's a whole different topic.