Let me revise my point a little bit. What worries me more, is how easy it is to do that 500 + damage with Hwai with full Hyper Drive meter. Other characters can do that much, of course, but it costs at least 1-2 meters and they aren't piss-easy to do.
Regardless of how easy a combo is, you can't dismiss how damaging is. That is fundamentally more important than how easy a combo is. I gave an example of how much damage Hwa can output and you dismissed it, yet you're bringing up damage numbers again. In that case, it's easy to get 700+ damage with Hwa with 0 stocks/full drive.
Here's a relevant topic example to show that I'm not discussing this for the sake of arguing:
Shen. He can kill a character with the least amount of hits, outside of dropkick Raiden. He also has a command grab and answers to zoning. Not top tier.
Does that make sense?
Let me preface this by saying that I am both a Shen player and a Hwa player. I generally get better results with Shen than I do with Hwa if I'm playing against lower-level players. That being said:
Shen's meterless damage is actually damn near the lowest in the whole game, and he has literally no defensive or offensive tools at all aside from that grab or abusing invulnerability on his EXDM, both of which cost meter. His non-EX grab is slow to come out and gives piss-poor damage and no oki or anything useful really. Shen needs either a 1-frame link or FULL HD Gauge to do ANYTHING from a low hit, and his only overhead is so negative on block that Shen is asking to eat a full combo if he ever does it. So let's see, Shen with meter has... a good command grab, weak lows, super horrible overhead, no safe way to get close to opponents with better pokes than him (about half of the cast). Shen with full HD Gauge can do an HD combo from low, which is a feature that every single character has. If damage was the only thing that mattered, Shen would STILL not be top tier, because outside of HD mode he's STILL beaten by at least 6 other characters just off the top of my head, and WITH HD combos he's basically tied with almost every other character in the game in terms of damage.
Literally the only aspect that Shen would be top tier for is ease of use.
However for 1.5-ish drive and 1 meter (to drink) Hwa can in fact literally kill you from full health anywhere in the stage, but he also has invulnerable shoryu attacks which can lead to over 850 damage and a command grab that deals 400 damage for 1 stock, making it the single highest damage 1-stock move in the game. He also has safe pressure, waaaaay better pokes than Shen and beats him outright in every single department EXCEPT for ease of use. Yes Hwa's damage is low when he has 0 meter and 0 drive, but he can still poke and pressure MUCH better than Shen can, and he builds meter faster than almost any other character in the game, while Shen builds it extremely slowly. The character balance in XIII is quite good, but there are some characters that are obviously outclassed in every single aspect of the game by other characters. I mean, with 1 drive and 0 stock Hwa can deal more damage than Shen's best non-HD 1 drive 2 stock combos.
Louis is right about Hwa being broken. He's probably the strongest character in the game, period. People just haven't quite caught on yet. Louis doesn't quite have the numbers even close to as high as they actually are, but he certainly gets the fact that Hwa's potential damage and ability to land hits are insanely good compared to any other character in the game.
The nerf that I propose is actually quite needed, and it's also very easy to see why. If you make Hwa less able to gain meter while drunk (as opposed to how it is now, where he actually gains MORE meter while drunk), he'll be fairly balanced. Just cut his meter gain in half, or maybe even worse. As it is now, he has midscreen drive combos which build over 4 meter back.