That's true. Make a character too good and the tourneys will be flooded with him, especially if the character is an iconic one from a well-known, generation spanning franchise.
In fact, there is a theory that the REASON well-known, awesome characters are nerfed is to balance player appeal. Link has high built-in appeal, so to try and make sure the lesser-known characters are used in CASUAL play they make sure he is not totally freakin awesome. Of course, this is just a shared thought between some people and isn't really based in any evidence; however, it does make sense (again, from a casual gaming standpoint, which many would argue the developers are much more interested in).
I think a mid-tier Link will allow for the chance that we'll see him at grand finals (Isai took Link to grand finals in SSB64 one year), without making him an obvious and therefore a boring choice. Just my opinion, though.