Let's piece this together then.
As a young learning pilot most people avoid using tools, because it will damage your ship.
Next they will start using phoenix claw for short periods to get that quick turn, and they will like it and keep it around.
Next they may try kerosene or tar barrel after seeing someone else use it effectively.
The last thing a newer player will try doing regularly is use vertical tools. This is due primarily to 2 factors: the damage levels attached, and a Khanian mentality. It seems silly to wreck your own balloon to lose your own gun arcs, and most beginner builds tend towards guns with mostly straight forwards arcs (see: metamidion). This isn't to say being above someone doesn't work with these guns, just that it feels more natural to just get them at the same level.
For newer players the current stats keep most of the fighting on a Khanian level. This helps newer players get accustomed to the game, gunners get a chance to shoot regularly, pilots aren't thinking too hard about where an enemy ship is, everything is just on the table in front of them.
With more experienced players, we know how to use the vertical tools pretty effectively, to the point where not having a counter to the vertical tools will get you locked down pretty regularly. We are willing to use tools to get out of the plane of combat and make repairs/get in a better position. However, as you mention, it has a much greater effect on the ships with less mass. Something like a squid will rocket upwards, while a pyramidion moves more slowly. (I disagree that you barely notice hydrogen in a pyra - I usually feel like I'm soaring, but then I never play anything else, so any change is big) The way things currently are, there is no way a pyramidion could keep up and keep arcs with a rising squid unless the pyramidion anticipates it quickly and rises while using hydrogen. The pyra pilot knows the squid can't use too much hydrogen or risk losing its maneuverability, so he knows he has one shot to keep guns on the squid for the first pass. In response a squid could drop down under the pyra and take advantage of the lag time associated with using the tool.
Now let's make the tools not have a lag period and give them repairable damage.
In novice matches, I am envisioning these being some of the first tools used regularly, leading to matches where the gunners and gun loadouts are still set for a Khanian match, but the pilots are bobbing their ships up and down so much trying to dodge bullets that the gunners never get to shoot, and the engineers are only ever on the balloons.
Squids and mobulas quickly become the only close range ships as their ability to move up and down lets them keep out of the gun arcs of every other ship at close range.
The only way to counter this is to go long range and try to snipe from a position where you have arcs no matter what height your enemy is at.
The game becomes slower because now that the vertical evasion tool is a viable option for consistent use during a match, the pilot will focus more on dodging bullets than on directing appropriate fire. Anyone not using the tools will be left with no gun arcs because they can simply never maintain gun arcs.
Pilots bring both vertical tools to give themselves precise control over their vertical movement. This leaves them with one slot left: phoenix claw so they can quickly turn on enemies, or kerosene. Without using both kerosene and phoenix claw, pilots will lose the bravery to charge in knowing they can quickly recover from mistakes. The game begins to move away from CQC entirely as pilots and crews focus their attentions on defeating vertical motion.
Um. Maybe that is a little drastic. My point being, currently the squid is in a tough spot right now as the nimble ship. You can't make it too nimble, or it becomes overpowered. Too nimble and even the best pilots won't be able to prevent a squid sitting in behind them. As they are though, a good pilot can always get a squid in arcs (except maybe on galleon?) and take it out. Squids are the only ship I see needing better vertical motion.
As a side note, I actually like the tools having a lag timer. I can pop hydrogen then use phoenix claw for a super fast recovery by turning faster and rising faster
at the same time. It sort of makes these tools a little bit more powerful if you ask me.
Long story short, the game plays in a semi-Khanian mindset, and the tools are designed to allow you to maneuver best within this mindset. The vertical tools give strategic thinkers the potential to (sorry) "rise above" such a mindset, but the game is trying to push you to engage an enemy at an altitude somewhat comparable to your own. This is why there are no guns that default point straight up or down. Buff the vertical tools and you make a game set in a semi-Khanian mindeset that can only be played by thinking anti-Khanian. If you can only play a game effectively by using strategies counter to how the devs designed the game, something is wrong. Squids do need a small buff to be more viable in higher level play, but this isn't the answer. At least not to me.
*edit* I love the term Khanian too, and I used it liberally. I hope you don't mind.