IMO, Sunset Shimmer is the weakest of the major villains we've encountered so far, but I don't think that makes her "bad". After all, unlike all the other villains, Sunset is just about the same age as Twilight, and she also shared the same status as Celestia's student like Twilight. However, what makes Sunset Shimmer works for EqG was the fact that she rejected the magic of friendship way back when, opting instead to be a cold, power-hungry pony/human. She didn't need to live up to the likes of Nightmare Moon, Discord, Chrysalis, and Sombra. What we see with Sunset Shimmer is what happens when you live your life without the magic of friendship. You become cold, selfish, and spiteful, going so far to drive everyone around you apart just to reaffirm your own "popularity". And when she finally gets to wear the element of magic, it turns her into what she had become, a demon.
And all this comes back to my original point, Sunset Shimmer is still a young pony/young woman, and she's still has a lot of life learning to do, much like Twilight and her friends. The difference again is that Sunset rejected friendship and went solo all this time while Twilight and her friends have each other to figure things out. It's that simple contrast that makes Sunset Shimmer an effective antagonist for Equestria Girls.
Again, she is not in the same league as the other major bad guys, but she isn't meant to be. That's just my two cents.