It's definitely not, but it's definitely really good.
It deals 7/10/15 damage at max fall-off/neutral distance/max ramp-up. I feel like a lot of people look at these numbers, see that they're really low, and dismiss it as a powerful weapon (even if it's only subconsciously). But its attack cooldown is 0.15 seconds, making it attack 6.66(6) times per second. Assuming you're able to hit your shots, that means you're doing 46.66(6)/66.66(6)/100 DPS, all of which are pretty good for their respective ranges.
By taking a flank or peeking a corner, it's easy to accumulate 40-80 damage without exposing oneself to much danger. On Mechanic, he can use it for nearly a minute straight. Considering it's respectable DPS, that's going to be some pretty respectable damage.
Another thing that I think makes people dismiss the pistol: it's on two light classes. Neither of them are in a position to really let loose and let its DPS show itself, and are forced to flank or get the jump on players to use it. If they're under fire, chances are they're more concerned with getting out of fire, which means using their primaries to end the fight as quickly as possible.
But, this idea of using a primary instead reveals another part of the beauty of the pistol: it's longer-ranged than a lot of other weapons in the game. The closer you are to an enemy, the more at-risk you are, and the less damage you can do. The pistol, having a solid 66 DPS at mid-range, messes with this, and can result in it relatively dealing more damage. Think of it like Marksman: at point blank, 150 damage is good, but it's not crazy. But 150 damage from across the map, it's kinda crazy. The further you are when you deal damage, the more valuable that damage becomes because you are less susceptible to damage yourself.
Building on this point, imagine you're fighting a Trooper as Mechanic, and are only using your pistol (assume you have the Rescue Ranger or whatever). Getting all up in his face would be a pretty bad idea, as that means you can easily get two shot. But with the pistol, you can make some space and decrease the potential damage of yourself and the Trooper. However, your potential damage decreases less than the trooper's does because you're using the pistol, which scales better at range.
The long and short of it is that the pistol is truly a mid-ranged weapon, unlike other weapons like Shotguns or Rocket Launchers or Miniguns, which rely on being as close as possible. By keeping your distance, you can put out great damage, since you are less affected by range than your opponent is.
