Hes not the worst character in the game, but hes down there around bottom 10 or so.
As for what made him so powerful that he deserved to be beat to death with a nerf hammer? In a word, nothing. Pretty much every nerf that happened to him was entirely uncalled for and unnessecary. There is a big difference between something actually being to powerful and something just appearing that way at first because the game is new. That's what happened with Subzero.
When MK9 first came out obviously as we all know Tom Brady was one of a bunch of testers from the community NRS had gathered to take a look at the game before its final form was released to the public. So he had a slight head start on the rest of the community as far as character tech goes. Not as huge amount of a head start as people would like to believe, but a head start nonetheless. Subzero was Tom Bradys main character. He won the first major tournament for MK9 in late April of 2011 which was Powerup convincingly with a lot of good footsies, reads and corner ice clone traps that no one had yet seen. Almost immediately the cries began on the forum and TYM was deluged in a river of tears from people who had only been playing the game for about two weeks since it came out.
Tom made the character look much better then he really was.(This is something Tom never stopped doing despite all the nerfs as there was never a time when he wasn't the top Subzero player out there) So really its all Tom Bradys fault Subzero got nerfed to death( I kid I kid lol)
The fact is that all these things that seemed so powerful,(clone traps,22, GF reset, higher damage, more knockdown advantage after slide etc etc) were later shown to be just average tools as the rest of the game became more developed. But by the time the game was more developed it was to late, most of that stuff was gone and the ice clones use was severely curtailed because NRS handed out armor moves to the rest of the cast like it was candy on Halloween.
So in hindsight really nothing he had was really that great even at the beginning. He was better for sure than he turned out later. Had he been left untouched he still wouldn't be a top 5 character, or maybe even not top 10. He still would have been slaughtered in all the same matchups he gets murdered in now. Kung Lao still would have killed him, Kitana, Cyrax etc etc. Its a classic case of something seeming to good at first and then finding out later it really wasn't that great at all.
R.I.P. Subby.