I think she's not a high tier, but no lower than mid. While her kill power is actually great now as of the latest patch, her damage output is simply too un-rewarding for the amount of effort her combos require. Compare her to a definite top/high tier like Daisy:
-Both are combo monsters capable of 60% combos
-Both have aerials which are safe on shield if done correctly, not safe on shield if spaced wrong (or not float-cancelled in Daisy's case)
-Sheik has many kill setups which are safe pressure if spaced right (F-tilt, D-tilt, Nair, Needles), while Daisy has many moves with direct high kill power that are also safe if spaced right/float cancelled (Nair/Fair/Bair/the occasional forward or back throw).
-Both have an excellent projectile that the character can comfortably camp with or advance with for kill setups, including offstage edge guards.
-Both have versatile recoveries with many mixup options for escaping disadvantage (Shiek DownB/B-reverse needles, Daisy Float)
Looking good, right? But there are a few extra things we take for granted that start to highlight differences:
-Both are light but Daisy is a fair bit heavier (89 vs 78)
-While Sheik can occasionally get a kill off of a throw via DI mix-up into an aerial, Daisy's forward/back throw outright kill at ledge at sufficient %
-Daisy's stray hits deal much more damage than Sheik's stray hits, so trade situations are usually a loss for Sheik, while Daisy usually benefits or breaks even. For example Sheik Nair does 7% on sweetspot, Daisy Nair does 15%. So if I'm dropping combos as either character, my stray hits are going to wrack up much more damage as Daisy.
Ok so comparing two characters is always really washy because every character is so unique. But I think the key points are highlighted here: Sheik is held up to an equally high standard for her optimal combos as the other combo-monsters in the game in terms of execution, but is far less rewarded for sub-optimal play, and because of her featherweight is more heavily punished for mistakes/reads than other characters. These exclude her from high tier while at the same time, she has too many top-tier characteristics to be low tier.