Sly's LvL 1 needs to be nerfed. Unlike other characters, his LvL 1 is released regardless if he gets hit or not. For example, in the heat of battle it's almost impossible for Big Daddy to use his LvL 1 because if he gets hit his LvL 1 never releases. Almost all characters are like that, But -again- Sly's releases regardless.

Heihachi's Lvl 2 is a bit overpowered as well. It's better than his LvL 3 in my opinion.

Sweet Tooth's LvL 2 sucks dick! That's probably the biggest mistake in this game. Sweet Tooth was dealt injustice with his LvL 2.

Parrapa's Lvl 2 is better than his LvL 3 as well.

Sackboy needs to be toned down. Actually, he's just annoying.

It doesn't help that Sly can turn invisible and then release his Level 1. In FFA, you're bound to lose track of him and get surprised by his Level 1.

It doesn't help that Sly can turn invisible and then release his Level 1. In FFA, you're bound to lose track of him and get surprised by his Level 1.

Sly's LvL 1 needs to be nerfed. Unlike other characters, his LvL 1 is released regardless if he gets hit or not. For example, in the heat of battle it's almost impossible for Big Daddy to use his LvL 1 because if he gets hit his LvL 1 never releases. Almost all characters are like that, But -again- Sly's releases regardless.

Heihachi's Lvl 2 is a bit overpowered as well. It's better than his LvL 3 in my opinion.

Sweet Tooth's LvL 2 sucks dick! That's probably the biggest mistake in this game. Sweet Tooth was dealt injustice with his LvL 2.

Parrapa's Lvl 2 is better than his LvL 3 as well.

Sackboy needs to be toned down. Actually, he's just annoying.

I agree with everything you said except Heihachi and Parappa's Lvl 2's being better than their 3s. I have no problem avoiding Heihachi's. Parappa's debatable because he's freakishly agile on that board (why the hell can he double jump on that thing?). Kuma, really doesn't take that much effort to avoid. The certainty of Their LVL3's is actually very nice. I recently had a match where I just coudln't land a lvl1 or 2 on an opponent in an 1 on 1 stock match (He was using Dante, I was using Spike). I was able to win that match only because I worked for my lvl 3 twice for his last two stocks, all while keeping his AP down with grabs. 

In FFA, those insta-kill lvl3's don't mean much but in 1v1 and 2v2 they can win games and are nice tool to have.

EDIT:

The two characters I meant were Kratos and Sly. Sly has invisibility, huge amount of approach options, can't be knocked out of his level 1, a stun projectice, mines, a basic attack that makes you lose AP, a parry/counter that works both long and short distances. His counter is actually better than Kratos' as kratos can miss long range counters. Sly teleports to you when he counters. 

The two characters that definitly need to be buffed are Jak and... well. Really just Jak. I was originally gonna also say Sir Dan but on second though, he's fine. His supers could use some improvement.  His Lvl is horribly situational. I recently noticed you can fire it straight up and back diagonal but it still a very weak super. His Lvl2 is also very dodgeable. I find myself not using it unless I can guarantee at least one kill with his initial blast above and just hope the escaped souls get me one more. On the bigger stages like Stowaways, his level 3 becomes virtually useless.  If the souls in his lvl2 were just a bit faster i'd be perfectly fine with Dan. He gains AP pretty fast. Especially with his down circle. I love when my opponents are huddled up and all 3 sit in the flames for a few seconds, XD

With Spike a good way to catch people with your Level 1 Super is to use your Neutral Triangle attack, it's hard to hit someone with it but if you do the opponent falls on his knees and is vunerable for about 2 seconds which means he can't dodge out of the way of your Super.