I think the only thing PM Sonic got right is the flashy animations. I pretty much hate everything else.
Brawl and Sm4sh Sonic both have Spinshot, which helps make up for lack of ground to aerial momentum. As for overall speed and fluidity, I agree in part with the issue lying in Brawl's engine, but considering that's an issue with the entire game, I don't think Sonic is particularly held back anymore than any other character. He also has movement out of spindashes to work with, which also make up for his raw dash to jump transition. Side note: Sonic not only has the fastest ground speed, but he also has one of the better recoveries in the game, only improved upon in Sm4sh to now have SideB and UpB snap to the ledge. The UpB buff is huge imo, considering as I've mentioned previously how Sonic is always forced to recover high to stay safe, which is a little counter-intuitive considering the best part of his UpB is his vertical distance. Plus Sonic's ground speed alone allows him to get places and punish things that no other character can dream of challenging.
When you make a character's ground speed twice as fast as the previous fastest character in the game, you'd have to imagine that there's going to be a checks and balances. If Sonic's smashes were fast and all of his aerials had little to no ending lag in a game that's as "slow" as Brawl, Sonic would be outright ridiculous. Speaking of PM... I think we all remember when Sonic was top tier in that game. Now what happened to him? Just sayin'. I still can't even cancel **** with him. Boring. As for Sonic's lack of KO power... Yes. I think everyone agrees that Sonic's only major problem in Brawl is a lack of reliable KO option or set-up, but I don't think that lies inherently in his overall "power".
In any fighting game I've ever played, I go for the characters with a lot of mix-up options and/or speed. Ibuki, Talim, Platinum, etc. So going back to Sonic's ground speed being twice as fast as the previous top speed character, I love that Sonic is about mix-ups. This may be a personal thing for me, but if you give a character speed AND strength, that doesn't quite make sense. I love fast characters that open you up and make smart hits that add up quickly. So again, this leads to Sonic's biggest flaw... Then what? In games like Street Fighter, Soul Calibur, Blazblue, etc. you have a life bar where a jab can be enough to get the kill sometimes... So how does Sonic kill?
I think if you ask any Sonic, his strongest point is edgeguarding... But in a game where the opponent generally is very safe when recovering, this isn't a huge selling point (granted spring drops and the like can be deadly). Sm4sh so far has shown us that Sonic's dair can spike, and spring doesn't go away after it hits someone on it's way down. I imagine Sonic's selling points will again be similar to those of Brawl, but enhanced. Sonic looks like his kills will come from edgeguards, especially considering that his uair was buffed in terms of ease to combo, but nerfed as a KO option. You won't be seeing a lot of spring > uair KOs anymore.
Even with Sonic's current KO options in Brawl, Fsmash aka Hypnosmash is a lot better than most acknowledge. It's disjointed, and his hurtbox shrinks when he takes a step back before the release of it. I can't tell you how many people I
STILL **** up with that thing.