How about some tweaks to the flamethrower so it hurts more but in short bursts? Say, reduce clip by 25% but fasten reload time a bit, so there's less of constant fire?
Also, cheming is boring, but then again most of engineering is a bit dull. I like the idea of chem not being limited by time but more by its* durability. I don't like the idea of nerfing the chem because it requires a lot of skill and I think the level of reward for that skill is good. As someone also mentioned - flamethrower also deals damage, so engineer is under a lot of pressure to maintain the chem cycle and also repair.
To the extinguisher - it may not be 'competetive' against chem, but I still think that making it 2sec cooldown and 4sec immunity made a great deal. Perhaps put a version with 5sec immunity into DevApp and see how it goes, but since extinguisher is much easier to use it should be less effective.
*I always mistake it - it should be it's or its?