Solo and TW queue are Splatoon. That's the game. And that's what the game is designed to be balanced around. Nintendo doesn't really make competition oriented games. They know it exists, they generally don't care, and they go out of their way to not cater to what is a very, very small niche audience - but they do not balance their games, including (actually, especially) Smash around the competitive players. They balance around the mainstream players. In Splatoon's case I'd say they arguably balance mostly based on B ranks.
I don't disagree with your view of how dynamo can be used or targeted in competitive play, but my point is don't mistake that for something Nintendo balances around, or even cares more than remotely enough to make token gestures about. The solo queue is, by far, their broader audience, and that is the one they design/balance the game for. In that context dynamo is SEVERELY broken by it's very design.
Also, I don't mean to disparage dynamo users, it's a difficult weapon in many ways to use well, absolutely. But the way it interacts with the rest of the game leaves it in a permanently broken state - hard to get hits with it, hard to avoid it. The user plays a weapon that's hard to hit anything with, and their opponents see a weapon that kills anything in sniper range for 45 degrees in any direction in a single hit and nearly EVERY encounter with a dynamo ends in a trade at best even if the dynamo died seconds prior. It doesn't react with the global P2P network well at all. A dynamo with a lag advantage is nearly invincible. I used to blame this PURELY on lag, however last time I took out dynamo a week or two ago to play with Tempered, I discovered *I* was onko'ing people way off to my left side. It might not be just a lag issue on the receiving side - there might be something really weird about the hitbox. If you nerf it, it becomes too hard to use effectively. If it you buff it, it's the only weapon that matters. As it is, it's just broken. That's why I think maybe a nerf that DOES kind of make it useless will lead to it being abandoned and effectively remove it from the game by making it a rare choice. I don't like doing that to weapons, but the dynamofest that splatfest has become can't be permitted to continue for example. The main problem, is, say, a sploosh - SHOULD be able to run up to a dynamo and take them out fast between swings. Yet more times than not, they swing, I run up and take them out, then a magic wave from nowhere catches me as I walk AWAY, on the right 30% of its arc, and I'm splatted. Other weapons have lag issues, other weapons have magic ohkos, but none come close to the dynamo's issue of brokenness. You might say it's the netcode's fault and not the weapons, which is true, but it doesn't change the fact that the weapon's interaction with said bad netcode yields a very broken result.