The grab-release issue has already been resolved. EIDI, I believe.
You don't consider 120% a good killing percent? Ness will easily kill there with a simple grab -> Bthrow.
You can hardly count his camping game as something to keep him out of Middle Tier. Especially when other characters there don't even HAVE one ( Ike, Bowser).
Same goes with flawed recovery. ( Olimar, Bowser, I believe)
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IMO, the only thing keeping Ness out of Middle is his crappy tournament results. And regardless of that fact, he is almost GUARANTEED top of Low Tier. >_<
Even with EIDI, don't some characters get free moves from a grab? (Marth fsmash?)
Bthrow is fine, but for one thing it's bad to count on grabs for kills when people get really good at good characters' spacing games, and for another as a kill move 120% is pretty average, and his more landable kill moves like bair, upair and nair don't get much better for percent.
I'll admit it exists. It's just very slow. An absorbable/thoroughly blockable 8% of lightning with no chance of killing just isn't that threatening from across the stage, and PK Fire is just kind of blockable. Where many characters can wreck you from a distance and make it hard to get to them from there, Ness usually just gets them to approach at best.
You're pretty much right about the recovery thing. However, with say Olimar, recovery and being light enough to die early if you screw up is close to his only serious flaw. With Ness it's just one more little thing you have to compensate for.
Fights with Ness are generally realistically winnable (with some exceptions), but the same goes for a lot of lesser characters. He currently doesn't have the stuff to push it so that most of those fights are actually in his favor, plus he has some unfortunate other little flaws to worry about, which defines upper low tier to me.
for the record I fourth him and PKT is pretty cool