Abilities themselves are fine, but Gamefreak's handling of Abilities on newer Pokemon has been awful. Originally Abilities were used to rebalance the Gen 1 and 2 Pokemon and add a new dimension to the battle system. Later, Hidden Abilities were added as a way to rebalance older Pokemon once again. Skill Link, for instance, made Cloyster into a viable competitor after being mediocre.

However, nowadays, Abilities are either assigned to give Pokemon a one-off gimmick (removing a whole element of strategy,) or just badly distributed. Worse, because nearly every Pokemon has 3 abilities from the start now, that means there's no chance in the future for a Pokemon to be rebalanced with a new Ability the way earlier Pokemon were.

Short of adding a 4th Ability or completely changing how Abilities are assigned though, I have no idea how Gamefreak can fix this.