Strafe fly has always been a glitch, as well as flying faster that the top flying speed IIRC. This would mean that Tails' flight slows him down tremendously if the glitches weren't around.
Furthermore, while a strafe flying Tails, or a Tails flying high into the sky may be hard to hit, they also won't be hitting many other people to get points or help the team. This is because firstly in software players cannot aim completely downwards, and secondly, hitting people from the air is much more of a challenge anyway. You're always moving slightly so you can't control where you're aiming as well, and players on the ground are moving much faster across the screen when you're looking down because they're generally moving further in both directions instead of just across the X axis.
So, unless you have explosions that you can spam, most of the time which are already taken by the faster characters so that you cannot get to them, or can aim a rail at targets moving collectively faster across the screen. Shooting from the air is almost never ideal.
Even without strafe fly, a game without rails usually gives Tails the advantage. First of all, the grenade garbage is almost completely avoidable with Tails. While I agree that software mode's inability to point completely downwards can be stifling, a Tails player is, for the most part, not going to be pointing directly downwards at all, or in any one spot for that matter; they'll be pointing at an angle. Getting to bombs is usually 50/50 in this game. In Icicle Falls a Sonic player will more than likely grab it first(neglecting strafe fly), while in Twisted Terminal there's no way in heck Sonic is getting a bomb before Tails. It really just depends on their individual abilities, so the positioning of the weapons also factors in to the overall balance. SRB2DUDE(CHOPPER) posts pretty good examples of legit Tails gameplay. Check out the clip below for an example:
http://www.youtube.com/watch?v=gWIVRlbKU3A
(I am actually in this game; unfortunately I had no mouse at the time [I never learned to use mousepad, so I just played on keyboard] so many of my gameplay methods were gone, and it didn't help that there was over 200 ping considering distance but the point still stands.) Admittedly, he does use rails for a big part of the game, but there is still a reasonable amount of good bomb game in here (I recommend checking out part 2 as well). There are many more examples of good Tails play on
his channel without much use of the rail ring. Tails players play like they know that it is next to impossible to hit them when they fly; even CHOPPER had trouble aiming at other Tails players as shown in the clip above (the rise and sink mixup in one part of the match made it pretty unpractical to shoot at one Tails player who was flying almost right in front of him). When a Sonic player panics, they thok. Likewise, when a Tails player panics, they fly. This is where lots of the rail hate comes from: panic-flying will not save you from rails. It might save you from redrings, autos, bounces, scatters, grenades, or even bombs, but once a player is dedicated to using a rail ring on you, flying is not going to help, and it can get annoying knowing this.
In 2.1, its not only been said that Knuckles can just see himself while climbing now in first person mode (it zooms out.), but that Tails' flight has been modified to play like Sonic 3 and strafe fly has been removed in the trunk builds for ages because bug abusing is stupid.
Another thing 21kHzBANK21kHz hilariously neglects in his post is how predictable flight is. You know where Tails is landing and just send a bomb ring in the general direction of that spot, no matter if he lands on a higher platform than you can reach or not, he's finished.
Thing is, kte can already do that with good scripting. Just go 3rd person and zoom out. Either way, a climbing kte is the true definition of a sitting duck in this game. It's possible to see someone coming and try avoid rings, but it's still alot less safe than just flying, and Tails doesn't have to be close to a wall (bombs away) to get wherever Knuckles is going.
Bomb range is OP, yes, but I think you're kind of overestimating it. When I said there's nothing Sonic could do, I meant it. You could try bombing the underside of a platform in Meadow Match, but the likelihood of you hitting the target you can't see is very small (not even considering that anyone would be able to tell you were trying to bomb them and just fly above the platform, forcing you to waste your ammo on nothing). And Meadow is just a saving grace in this situation, most platforms are too dense for the bomb's range anyway, such as the platforms in Sapphire Falls that most Tails players escape to scathe-free or better yet, my Cloud Palace example. Tails may be more predictable than Sonic, and definitely more predictable than Knuckles, but whether or not you
know what he's going to do doesn't matter if you can't stop it. Fact is, Tails may not be easy to play at first, but a Tails player that knows the game can be a serious pain. He's hard enough to stop already in Nimbus Ruins, let's not make it impossible by nerfing the rail ring.
http://www.youtube.com/user/ThatSrb2DUDE?feature=watch