Dr. Horrible of Dr. Horrible's Sing-Along Blog, portrayed as a decent fellow with evil ambitions and a crush on a girl from his laundromat, while also being bullied around by Jerk Jock superhero Captain Hammer.
Interestingly, at the very beginning, he gets a letter from a would-be superhero calling himself Johnny Snow. Horrible immediately makes it seem as if Snow is an Ineffectual Sympathetic Hero. Then we read the prequel comics and see how Johnny Snow single-handedly stopped the entire Evil League of Evil while Captain Hammer was out of town. It turns out that he's also a Gadgeteer Genius. That "ice beam" which is so "Johnny Snow" that Horrible mentions in his song was actually used by Snow.
"Stops" is kind of the wrong word here. The League was planning to pour poison in the watermain For the Evulz, and Johnny Snow stopped them by freezing the water, leaving millions without water. The ELE approved and went on to do more evil, with Johnny crying that he's a good guy.
Dr. Horrible's main problem with Johnny Snow is that Snow wants to set himself up as a nemesis, when the doctor has much more personal reasons for reserving this for Captain Hammer.
Surprisingly absent in Worm despite the focus on villains due to the protagonist being one...sortof. Most villains mentioned more than just in the background are extremely effective.
The closest this trope gets is Uber and Leet, a pair of video game nerds who make internet videos out of their heists. They're mostly useless and obvious underdogs in a city filled with far more menacing gangs but are just despicable enough to destroy any sympathy they might garner.
Lee Phillips from KateModern, during his brief time as a villain. He is perfectly serious in his plot to revenge himself on Gavin and Tariq, but is overshadowed by the arrival of far more threatening antagonists such as Kate's Watcher and Terrence.
Voldemort in Potter Puppet Pals. Taken to ridiculous extremes when Harry has Hagrid beating up every character that bothers him. Voldemort tries to kill Harry, and Harry just leaves without even bothering to have him knocked out.
Voldemort: Ah! Harry! I've been WAITING for you! Avada Keda-
Harry: No time to chat, Voldemort! Gotta go! (runs off)
Voldemort: (audibly choking up) But... but, ah... oh, every time I try to kill Harry- (sob)
On a less mass-homicidal note, The Nostalgia Critic. He's pretty just a damaged little boy with a gun and temper tantrums at his disposal.
While she worms her way out of trouble much more successfully than the Critic and could dominate the world if she got her mind fixed, The Nostalgia Chick is still just a shut-in alcoholic who'll never make anything of her life.
Kami Steele of Survival of the FittestSpin-OffThe Program seems to fit on and off, depending on the thread. Her first appearance had her pointing a gun Gangsta Style at a girl with the intent to kill her, but ran away over being yelled at by said girl, who had started to poke holes in her plans. She has since started a body count, but still has her moments of incompetence. One could also make a case for Version 4's Jimmy Brennan, up until he beat Philip Ward to death with a branch. Prior to that, though, he definitely qualified due to his attitude.
Even its attempts to give itself intimidating names are utter failures, since it chooses names like "Prime Minister Sinister", "ShivaTron, Despoiler of all Mirth", and "Doom-Master Thirteen-Seventy, Master of all Doom".
In The Gamer's Alliance, Fred Nacht (aka Nightstalker Fred) tries to do his job of being a menacing villain but always ends up bumping into Nesa who foils his plans and humiliates him (often without Fred even realizing who his mysterious tormenter is).
Mario from Super Mario Logan, although not necessarily a villain, has failed in his numerous attempts to get rid of Jeffy, getting constantly annoyed and Driven to Suicide by him and his handicapped behavior. Taken Up to Eleven in "Jeffy's Bad Word!" where some fans genuinely felt sorry for him due to all the Mario torture porn he suffered from the video, especially the second half of the video starting from after he spanked Jeffy due to the latter saying the F-word (no, not that F-word).