paranoia has made disguises, and even cloaking, almost pointless. almost.
no it hasn't!
Don't go through choke points, don't cloak at bad spots, cloak in such a way they have no clue which way you went if running away, if you're going to use a disguise, remember you're that disguise, so don't even flinch when you get shot at all (they wouldn't.), avoid pyros (pretty easy except on a mass pyro rush but if thats happening the game isnt very serious anyways.), learn to side stab & quickstab, learn the environment.
Spy is one of the best and balanced classes still, they don't even need an upgrade to their stuff though they will do one to make them more novice friendly since Spy is the most unfriendly class to novices.
disguises and cloaking are two of the most useful mechanics in the game, the problem is is they aren't very friendly to novices or unorganized teams where your teammates will easily blow your cover for you, especially other spies on the team. a team that communicates effectively, and a spy who knows the lay of the land, is two of the most dangerous things put together in one.
this is like saying scouts are terrible to be honest
No they aren't, they're really drat good, the problem is is they require buckets load more skill and knowledge to use than the other classes.
edit: accidentally double posted xD