Tiers are formed based on a characters tools and their performance in tournaments. What matters most are results and actual data, this is how tiers get formed in the first place.
Well-
from my understanding, tiers are supposed to be based on raw matchup data. If you have favorable matchups and tools for fighting every single character in the game, you are high tier. If you have to get creative and actively work to bypass your opponent's tools, you're on a lower tier.
Tournament performance... I don't think tournament performance should factor into tiers. Tiers are supposed to be divorced from the human element given that they only apply to hypothetical perfect players and I think there's a lot of confusion regarding them.
An ease of use list, a tournament results list, and a tier list are three completely different things. I think so.
Even if your character is low tier, or you have a bad matchup against a character, that doesn't (personally) mean anything to me. You play against a human, they have weaknesses like everyone else, so you end up having to play the player, instead of playing the character, exploiting his own personal tendencies and patterns. You see Omega himself do this in SCIV, on paper every matchup is bad, but Zasalamel is pulling through and nobody knows why. Well, maybe Omega does.
I don't think Nightmare is the best, or in the best of the best. He has holes in his game. From my viewpoint, those weaknesses have not been properly, consistently exploited, time after time, ruthlessly, 100%. People are letting Nightmare get away with literal murder.
For all the talk about how Nightmare is broken or OP, people seem to run away from studying and analyzing the matchup and working on how they can win.
To say that Nightmare is great is to downplay the abilities of the players behind him. IMHO.
(PS, I liked your performance at NCR. I wanna see more of your play in the future.)