G&W takes damage more slowly than most characters. His defensive options are GOOD in Brawl. So he's not actually getting killed that quickly. He's getting killed at low percents yes, but it's hard to hit him in the first place. Add the fact he can dish out damage very fast, and kill at low percents, you have an amazing character.
Slow Smashes? That's mainly the U-smash. His D-smash is SUPER SUPER FAST and can be D-throwed into. The D-smash non-sweetspotted is a super strong semi-spike, which can gimp. They aren't nearly as slow as Ike's Smashes, but they are like nearly as strong.
G&W has a spike. The D-air on opening frames. He can also Footstool jump to D-air.
His aerials have GREAT knockback. His F-air, D-air, and U-air are among few that can kill reasonably. Factor in that his other aerials are still extremely useful, such as the B-air and N-air for approaching, and the U-air for wind stalling or for vertical kills.