In competitive play, Luigi is ranked 13 out of 26 characters on the Super Smash Bros Melee Tier list. Due to this, Luigi players rarely make it into top 8, in competitive tournaments. There was one instance in a national tournament: the Big house 5; however, the player was immediately eliminated, losing his first match, placing 8th in the tournament.
Luigi faces a problem where some of his moves are spectacular, but most of them are balanced in terms of other characters.
Balance doesn’t win matches.
Having flexible options, and above average moves makes you the best.
Luigi can be compared to someone who is untalented, but has a passion for a sport. He tries his hardest to compensate with unique ways to play, but still his potential is lacking compared to this upper class counterparts.
Although potential is lacking, I do believe he can rise up. He has a unique movement option: his extremely long wavedash. This is where all his potential is held, he is the only character with ability to use his wavedash to move. As before stated, he has balanced attack options.
Luigi compensates talent with his unique abilities.