We kind of have a difference on who dominates the meta.
I've actually held this stance before Diddy got patched and haven't changed it since then, but I believe it's Sheik all by herself who holds this title.
After that, she's followed by Rosa, ZSS, Pikachu, and a few others (I personally would put Fox, Luigi and Sonic up there too). The reason I mention this is that, while these characters are all extremely obnoxious and all pretty amazing in their own rights, they all have their own sets of weaknesses to help balance them out. Rosalina is huge, light, and kind of mid-tierish without Luma hanging around, ZSS has a really bad grab and struggles really hard against characters who crouch as low as Kirby, Sonic has no reliable ways to secure kills and kind of gets shut out by shield... I could keep going, but you get the idea. Sheik, though, doesn't have anything you could attribute as a character weakness, really. In addition, every strong character below Sheik also seems to have matchup checks in other top/high/mid tier matchups, whereas Sheik herself has a couple of 50:50s at best.
I do agree with the concept that characters should be buffed to kingdom come instead of applying nerfs to the cast, but there's a certain level of balance characters should strive towards. In my opinion, Sheik is not it, but rather the other characters directly below her.