I agree that Game and Watch is way too good.
It's probably just me, but I think that a reason this game FEELS more balanced is the fact that not many characters can combo any more, and that matchups seem to be more important given the wide variety of characters.
For example, because of the lack of long combos in Brawl, heavy, slow characters like Ike and Dedede have more of a chance to win and not be slaughtered by a random Dair combo. If they were in Melee, these characters would be a the bottom of the bottom of the tier list, and Mewtwo and Pichu would be laughing at them as they mopped the floor. This effectively makes half of the cast a lot more viable for competitive play, because they won't be destroyed by faster characters who can combo them to death.
As for matchups, they seem like they hold more weight. Snake may very well be top tier with his hitboxes and raw power and such, but he can be chain throw from 0 to 90% at the start of the match by Lucario, who also outranges him and beats him in terms of hitboxes and priority. This only happens because of Snake's weight in comparison to his falling speed. There aren't many other characters who Lucario can chain throw this well. Now I wouldn't say that Lucario is a Snake counter at all, but being able to easily take a character from 0 to 90 at the start of a match after landing something as simple as a jab or close range force palm is really worth considering, especially if said character trumps snake in range and priority with his basic attacks, and excells at defensive play.
Likewise, many Lucario players won't claim that Lucario counters Marth, but will recommend him as a good character to use against Marth because of those same crazy aura hitboxes that are on equal footing with the swordsman, excellent shield game and annoying projectile. Lucario also has the slight advantage of having hitboxes that linger.
It seems that there are many characters who have tools that they can use against other specific match ups to make things more interesting each time, even more so than in Melee. I mean, look at the Ice Climbers. They have 0-death chain throws that work against every character.