Debating relative terms using an absolute frame of reference is stupid.
Ryu has a lot of tools for just about everything, he has good high priority moves, solid damage, excellent footsies and easy combos. Compared to the rest of the cast that makes him good, even pretty damned good (I’d say top 3 overall), no matter how you define good to be.
Now there is a point to make about whether or not game balance requires that your bring down Ryu or bump up the rest of the cast and arguments can be made for both ways but the reality of it is that the real answer is something in between. Sometimes giving characters even a slight buff can fix some matchups but make others completely one sided. If you want a clearer idea of how that works just read sirlin’s blog about balancing HD Remix. People may not agree with some of the decisions Sirlin made but generally speaking I think he was successful in compressing the ST tiers and fixing some really bad matchups (like Guile Dhalsim went from a 2-8 to about a 4-6). So yeah, ideally nobody loses anything and everyone gains something to make them compete. In the real world though that doesn’t always happen and sometimes you have to be a little more flexible. If that means removing some options from Ryu that balances out the rest of the game then great, do it. And the same applies to all characters.
The other part of the puzzle is the game itself favors a certain playstyle that fits Ryu perfectly. He can zone, he can turtle, he can hit confirm relatively safe jabs into fairly damaging combos and he has some easy, mashable reversals. Whereas other characters have similar abilities given the perfect storm that are Ryu’s tools it gives him an advantage over most. The only reason it favors Sagat more is because he can turtle better and he has an even more damaging hit confirm combo. This isn’t Ryu or Sagat’s fault per se, it’s more about the design philosophy behind SFIV. And it needs to change.