Yes they do. But in Flash even when nerfed Barry remains by far the strongest person on the good side, which is why that's tolerable. On Arrow when he gets nerfed he gets brought down to the level of his sidekicks or lower. So the effect is much worse.
Plus it's just waisting time and space. You will never get to see those other characters have life outside being a sidekick as long as they remain sidekicks. Because between Oliver doing his thing and having to show everybody else being superheroic there just isn't enough time to how much else. In such scenario Oliver is the only one who gets to have some sort of life.
Both Laurel and Diggle were better characters when they weren't running around in masks. Thea at least has some of that mystical killer mumbo jumbo to fall back on when in field.
Barry is the fastest man alive. Even when you nerf him he's still going to have a spectacular skillset the other characters can't replicate. Doesn't stop the writers from making him do dumb shit from time to time, or write other characters in a way that's questionable. Let's not forget that Oliver took Barry down in a fight and
almost bodied Reverse Flash in the same season that he got kicked off a mountain by Ra's.
Oliver is a peak fighter with amazing archery skills, now he's surrounded by people that were trained by similarly amazing fighters. It's an inevitability with a team.
You know who else used to be a better character? Felicity. She never put on a mask. I wonder what happened?
They have been around that long but they were mostly hated. The time spent on their lives was hated more than Olicity. Mods had to step in all the time.
No, people hated the way the characters were written. Them having lives was never the problem. Mods stepped in because gross people were body shaming and getting off on talking about how all the female characters needed to die horribly. I don't care how drunk Laurel gets, there's no excuse for people to behave the way they did in those threads.
