Fire was hugely nerfed, so fire isn't good to rely on.
Explosive damage was nerfed, so you can't rely exclusively on it without sustained piercing damage; gatling needs to be on target which isn't possible, and Mercury isn't good for close range.
The Carronade... well, why not just fly a Goldfish?
The Squid's been through a lot of rough nerfs, especially the one back in beta/release that buffed all ship speeds, meaning the disparity between the Squid and other ships was reduced.
Its speed just isn't powerful enough to justify its horrible setup, firepower, and poor armor. So, yes, I believe the Squid is underpowered.
It needs more armor than hull, so it can do hit and run. It needs something done with its weapons; two front guns, maybe one of the guns set on the front diagonal position (the Spire treatment), or, as my friend suggested, the addition of a side Heavy weapon (though I personally don't like that suggestion too much).
It needs something. I'm not sure what, though.