Personally, without customs, I feel that Palutena is around mid-tier. I definitely don't think she's quite as bad as people say, but she has noticeable weaknesses that hold her back. Her default set makes her really defensive and read-based. Against slower characters, this works pretty well, but there are a lot of fast paced brawlers who have great mobility and safe options (like Sheik, Captain Falcon, Diddy Kong, and Sonic). These characters are very difficult to punish and kill effectively, since most of Palutena's kill options are really laggy, and any mistakes leave you wide open for a brutal punish.
However, with access to customs, I definitely agree that she is Top 10 material, possibly even Top 8. Super Speed, Jump Glide, and Lightweight drastically change her playstyle and cover a lot of her weaknesses. They give her much better approach options and greater mobility, and they turn her from a mediocre defense-based character into an offensive killing machine. Lightweight gives her a really fast movement speed and a guaranteed followup into Uair from Dthrow at kill percents, Jump Glide gives her a fast aerial approach that can jump over projectiles (like Sheik's needle), and Super Speed gives her greater mobility and access to many punish and mixup options, since it can be cancelled into an aerial, grab, or Smash Attack.
If you need further proof about how awesome Customs Palutena can be, check out the incredibly hype Winners Finals and Grand Finals from DBA 4 and the amazing gameplay that AeroLink showed against Larry Lurr's Luigi and Fox. If customs are allowed, Palutena is truly able to demonstrate the power of a goddess.