Couple reasons for this. First, we wanted the kids in general to be given avenues other than melee butt-kicking. The bully has d12 HD and fighter BAB, better than any other class, so we game him a pretty big flaw to counter-balance. Otherwise, he's quite strong at 1st level whereas classes like dreamer and nerd take a few levels before being able to do anything terribly powerful.
I'm starting to feel silly discussing game design with names like these, but I'll proceed.
Second, ironically enough, the bully works best as a team player. He's actually something like a battlebard (ooh, that has a . . . well, a ring to it. I won't say a nice ring to it.). His taunting abilities let him set up a combat to his buddies' advantage . . . slow down the big scary spellcaster with hesitation, help his friends get away by instilling doubt in the troll so it can't charge or run after them, lower that giant's Will save even more with worry, get a frail witch to charge through AoO's to get to him using the anger taunt, stop a baddie in his tracks with shock (really a
daze monster effect with at least 5 uses per day, up to 20 or so per day with imagination points! That's hugely powerful compared to other classes' limited spellcasting abilities), and finally the fright effect can end encounters in a single round. Also, these abilities allow the bully to be effective in combat without exposing himself to danger . . . he is, after all, a coward.
Continuing on the team player thread, I think Pile-On and Protector are extremely powerful. The kids already get a pretty good deal on grappling in Grimm . . . the bully is nuts! If he takes Improved Grapple as his bonus feat at 1st level, goes with the Martial Arts feat tree or the Street Fighter feat tree, he can lead some pretty effective dog piles against all kinds of bigger monsters. For the protector ability, if the bully takes the Spoiled feat tree and just stands next to the jock or the transformed dreamer while going full defensive, he can take damage for him while his ally dishes out the damage. When the bully inevitably gets scared and runs away, sure it's a blow to his pride, but that leaves the rest of the party fresh and unwounded to carry on the fight. With a dreamer ready to patch him back up, he can get back in there pretty quickly.
I can definitely see where you're coming from in terms of direct, independent abilities (the dreamer can turn into a full-on D&D fighter at 6th level . . . and the normal kid has a few nifty apotheosis options for 6th level as well), but I think our kid with the lead pipe has some potential.
