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In its debut, Feraligatr severely suffered from being a physically-oriented pure Water type. It had to rely on Normal type moves and Earthquake to use its best stat, and wasn't able to use Water or Ice nearly to the level of other Water-types. Further, Dark was also considered special, so it couldn't even use Bite effectively except as coverage.
It got better after the physical/special split, but was still inferior to most physical Water-types. Swampert was much better in that regard.
Eventually, once its hidden ability was released, it finally was able to shine to a degree after spending so long as a mediocre Pokemon.
Feraligatr is my favorite Gen 2 starter and one of my top 5 starters, these are just reasons to the contrary.
