> Firstly, stock weapons are typically the strongest among each class.

While this is partially true, there's also a large set of items that are straight upgrades especially in competitive. The Cruisader's Crossbow, Ubersaw, Escape Plan and Gunboats are just a few examples of completely superior weapons and while their usage in casual isn't as wide spread you'd be hard pressed to find to find a serious competitive match where these aren't all being preferred.

There are also an assortment of weapons that are banned by competitive leagues because they practically break 6v6 gameplay. A good example is the wrangler + Rescue Ranger combo. With a good engineer it makes it practically impossible to kill a sentry.

I still agree with you that this doesn't make TF2 PTW for the other reasons you've listed, but it's occasionally been a problem in competitive when players don't have the "required" unlocks or the item servers are down.

I have about 250 hours in it, but I stopped playing in 2013. At the time, I found the drop system to be pretty unrewarding unless you paid for keys (or just bought what you want). Has it changed since then?

Yes, it has changed a lot since then. Most significantly, Valve did a ton of re-balancing, making stock weapons even more viable in regular play.