Unfortunately, a lot of the drama in such shows hinges on the odds being massively unequal: the villains always seem to have the heroes at a substantial disadvantage. To set a villain apart from being an Ineffectual Sympathetic Villain, a Harmless Villain, or otherwise being comedic, they are built up as the equal or superior to all of the heroes, a serious threat to their team. Often, they're far and away the strongest of the Evil Minions our heroes have faced thus far.
And then they switch sides, and they lose their powers. Suddenly, they're not substantially stronger than the others, and may be less powerful than the leader of the heroes. From a story telling perspective, it's more dramatic to have the villains be a threat to our heroes. But if the reformed villain remains more powerful than the hero, then the villain will outshine the hero and solve problems that the hero is supposed to solve. The depowering of the villain prevents the heroes from dominating their opponents.
There are a number of possible, rational justifications for why a villain-turned-ally is suddenly weaker than before:
If they were using Black Magic or some other "inherently evil" power and has now decided to leave it behind, this also obviously deprives them of their former power. (Unless, of course, the situation crosses the Godzilla Threshold.)
Friction with new, untrusting allies as well as feelings of personal guilt and shame can leave The Hero's new buddy handicapped by insecurity.
The debut of Yamcha. While initially posing a threat to Goku, then turning good, and saving everyone from the final threat (Goku in a Were creature form ironically), Yamcha often takes a backseat afterwards, [losing to the Big Bads of the tournament storyline, eventually rapidly fading from relevance.
Ditto Tenshinhan, who permanently crippled his first on-screen opponent, nearly did the same to Yamcha, and stood toe-to-toe with Goku in their first fight (and technically won), yet was quickly banished to Jobberdom. Only stayed in the big leagues due to his Kikouhou/Tri-Beam, which literally sapped the life from him. (And even then, later on, it was only good enough to sucker-punch Super Buu, who swiftly - and apparently permanently - returned the favor.)
Which is more than can be said for Chaozu, who didn't even win a single fight at all. That said, Tenshinhan, Yamcha and Chaozu do get a bit of redemption in a Filler episode where King Kai makes them go up against the Ginyu Force as a means of testing their training. And what's more, they win.
Vegeta in Dragon Ball Z had destroyed dozens of planets, but when he turned good, he was left permanent second-banana to Goku. At one point, he willingly becomes a minion of the current Big Bad, pointing out that as a hero, he could only ever be second-rate, but he was a damned good villain. That Vegeta is a better villain than hero is further highlighted by the fact that shortly after this he makes a secondHeel-Face Turn, in which he attempts to save the world via a Heroic Sacrifice. And fails. While he never really loses any power per se he simply Can't Catch Up to Goku's increasing power.
Even Majin Buu suffers from this midway through his own saga, as his attempts to go good are immediately followed by the evil parts of his heart besting him in combat and absorbing him. After he frees himself, he's mostly used to distract Kid Buu so that he can't interrupt Goku's charging of the Spirit Bomb, and in Dragon Ball GT, he doesn't partake in combat, instead fusing with Uub to give him a needed power boost (which still wasn't enough to take down the Big Bad of that saga without Goku's help).
In Beyblade, just about anyone who fought the Bladebreakers and reformed. The most egregious examples in this editor's mind are the Saint Shields, who provided a legitimate challenge for our heroes when they fought them, but were thrown aside by the Big Bad, and Tala, who got demoted from Big Bad in the first season to Kai's second banana in the third. Then he got seriously wounded when fighting the good fight.
In Digimon Adventure 02 the first Big Bad, the Emperor of the Digital World, joins the team and is, for the most part, not able to defeat Digimon he would have earlier brainwashed easily. Part of turning good required giving up the massive brainwashed armies he would have used, as well as the Applied Phlebotinum he used to take control of them so easily. It turns out that Ken's genius and ability in sports was heavily (it's unclear how much precisely) augmented by his being infected with the Dark Spore. In the dub, Oikawa outright states that this is what made Ken a genius, so theoretically, with the spore dormant...
In the original Digimon Adventure, Gatomon/Tailmon was capable of taking out the entire group of the Digidestined Champion-level Digimon, but when she joins the group, she has to Digivolve to Angewomon to take part in the battles. This is even worse in Digimon Adventure 02, where Gatomon loses her Tail Ring and is effectively reduced to the level of a Rookie for most of the series. She has to use a DigiEgg to have access to Champion-level power.
In Digimon Frontier, Duskmon is able to cross swords with Beowulfmon without breaking a sweat, and can hold his own against the entire team. following Koichi's Heel-Face Turn, his "purified" Dark Spirits are basically on-par with those of the rest of the group.
In Naruto there is a zig-zagged example: Gaara. A psychopathic villain who would kill without a second thought, he severely injured one of the main characters, and it looked like he was about to kill Sasuke. After losing to Naruto, he becomes an ally, and loses the drive/ruthlessness/insanity that let him be so completely over the top in a quest to justify his existence with destruction. Even then he was doing better against Kimimaro than Naruto and Lee in Drunken Master mode - they could barely even hit him even when his curse mark wasn't active, and Gaara was mostly winning against him even when his curse mark reached Level 2. He lost to Deidara due to sacrificing offence in order to protect his city (leading to him actually getting killed having his sealed beast extracted, only to be revived by another character at the cost of her life). He also became a Kage at age 15, beating Naruto to the punch, and when his rematch with Sasuke started, he clearly had the upper hand due to his sand absorbing the Amaterasu. Ultimately, he becomes more powerful then when he had his sealed beast, and even powerful than the sealed beast itself.
Zelgadis from Slayers, to a certain extent. While shown to have impressive powers while he still opposes the group and/or is in the plot's spotlight, once he joins the party he becomes close to useless combat-wise. Whenever he attacks, the attack usually accomplishes nothing, if only to show how powerful their adversary is. Also, his demonic ability to move faster than the eye can track seems to be largely forgotten, as it never allows him to dodge out of the way of incoming cannon blasts or spells while the rest of the party are unable to. The times when he does accomplish something in battle, it's usually something another character could've done just as well, be it shield or levitation. However, his decreasingly important role in battle is somewhat redeemed by the sheer variety of his skills, the hardiness of his stony skin (which enables him to take a cannonball to the head only to have it bounce off) and the fact that he's pretty much the only mature one in the group and often makes important discoveries and observations that the others had missed.
Temporarily used in Dragon Quest: Dai no Daibouken. When he leaves the dark side, Hyunckel loses some of his power; it's later explained to be a side-effect of losing the internal conflict that had driven him since childhood. When he finally finds a new reason to fight, he becomes more powerful than ever.
Usually played so straight it hurts in Kinnikuman, whereby a character trumped up to be an analytical genius killing machine cyborg proceeds to lose every damn fight after his Heel-Face Turn except for one. The reason for that was losing his memory and snapping back to his original brutal nature for part of the fight, thereby showing no restraint in mauling the opponent severely.
Renji from Bleach, albeit a justified example. By the time he comes around to the good guys side, the only baddies left to fight are the ones that would have kicked his ass even when he was on their side.
Nico Robin won almost all of her fights easily, had one of the highest bounties in the series, and was the second highest ranking member of Baroque Works before joining the Straw Hat Pirates. Afterwards, she can't keep up with the stronger characters anymore.
Despite being able to present a threat to the heroes when they fought against them, Buggy, Mr. 3 and Mr. 2 are barely able to take on the Mooks of Impel Down, whom Luffy is able to defeat almost effortlessly. Kind of justified with Buggy and Mr. 3 since they are cowards who fight strategically. While they didn't have the brute strength of Luffy the three helped in other aspects during one arc.
Lyrical Nanoha is generally good at averting this, with Fate, Arf, the Wolkenritter and Nove not seeming to become any less effective after their Heel-Face Turn. However...
Played straight with Reinforce. When she's on the evil side in As she had Nigh-Invulnerability and a city-sized Starlight Breaker. As a playable character on the good side in The Battle of Aces... not so much.
It took some time but it got finally played straight with the Wolkenritter. In StrikerS it was stated they've started to lose some of their healing factor and is implied their other powers will also start to weaken from that point onwards. They still managed to remain among the strongest characters during that season with impressive feats of damage endurance. Then came FORCE and the bad omen finally started to become true with them being showed to be significantly less powerful and resilient to damage than before (formerly able to take killing blows like nothing, both Vita and Signum got easily downed after a mere couple of slices). And then ends up subverted again in a latter chapter. When Signum wakes up and still recovering, she challenges Cypha again, this time with faulty weapon. And she completely trounces her before Cypha could repeat her previous feat.
Accelerator in A Certain Magical Index. Five minutes after deciding to stop being a jerk BAM! Brain damage. He got better alright and is even stronger than before!
While Jelly Jiggler from Bobobo-bo Bo-bobo was always pretty silly, he at least had some chops when he was a villain. After he turns good, though, he becomes the biggest Butt Monkey in the series.
Soul Eater: For the sadly brief period they were on the good guys' side, Crona had his/her strength decreased and stood up to Giriko marginally longer than Maka. An indication of how strong Giriko was being that he managed to cut Crona. The black blood had previously been damaged only by Maka's super-powered evil side and Death Scythe. The demotion was explained in the anime by Maka's special soul wavelength, and in the manga by Shinigami taking the souls Ragnarok had consumed. Crona's state following their Face Heel Turn would suggest they've 'improved' dramatically, Black Star's approach notwithstanding ('stronger than', apparently, 'reasoned with', hell no).
Rurouni Kenshin: Initially played straight with Sanosuke, who starts out as a tough fighter who takes Kenshin's attacks with ease. After his Heel-Face Turn, later opponents are shown to easily crush him, which drives Sano to go through training.
Double subverted in Suite Precure. When Siren changes sides and becomes Cure Beat, she's quite Badass and crushes the Monster of the Week easily two or three times, even finishing them off herself! After a dozen or so episodes later, she's the one getting defeated by a single Monster of the Week and Cure Rhythm and Melody have to bail her out.
Cure Muse is a neutral-to-good example, but otherwise she plays it awfully straight. Se spends half the series being a Mysterious Protector and a Badass, but the very first battle she's in after joining the main girls, it begins with her getting punched off by the Monster of the Week. Then her Special Move is ineffective and is told she has to rely in others. She eventually kills the Monster of the Week on her second try, but not before making it clear this trope is in effect. At least Ellen was awesome for a while!
Mobile Suit Gundam: Poor, poor, Char Aznable. As the infamous Red Comet of Zeon, he made many Federation soldiers wet their pants and was the only one to be able to go toe to toe with Amuro Ray. Once he took up the moniker of Quattro Bajina, he was finding himself getting owned all over the place, culminating in Haman Karn nearly killing him. Come Mobile Suit Gundam: Char's Counterattack, Char's back to being evil and being a Badass.
Aki, of Yu-Gi-Oh! 5Ds suffers from this. When she first appears, she tended to utilize intelligent and tactical moves that allowed her to dominate most of her fights, took blows without flinching or breaking stride, and had enough psychic power to destroy city blocks. Even against Yusei, she manages to keep her matches almost frighteningly close. Then she gained control of her powers and turned good. Upon this, she spent most of her Duels struggling against opponents she would have decimated, screamed whenever she got hit or lost, and seemed all too content to sit on the sidelines. She also largely dropped the Token comboes, Field Spell use, and Burn tactics that had once defined her strategy, in favor of simply using Black Rose Dragon as a beatstick. This wasn't helped by the decision to remove her powers outright, nor by the general switch to a Duelling format which she (almost inexplicably) had no experience in.
Satsuki in Kill la Kill is getting hit hard by this. Ryuko never used to be able to put a scratch on her. But in the very episode she pulled her Heel-Face Turn, her mothertrounced her, and since then she's been getting her ass kicked left and right—most of all by Ryuko. But that's what tends to happen when you're surrounded by Badass Abnormals...
Juggernaut was a literally an unstoppable force. Basically the only way to defeat him was to trick him into going away (or to remove his telepathy-blocking helmet, but getting the thing off generally necessitated a battle royale). After going through a Wonderful Life montage, he repented his evil ways and joined the good guys' side. Despite formerly being able to take out entire teams of superheroes by himself, he was now having trouble taking on solo villains as 'part' of a team. (When Juggernaut was at his most evil he could go toe-to-toe with Hulk or Thor, when he was at his most good with New Excalibur he got his ass handed to him by the Wrecking Crew, a C-list group of super thugs.) Justified in that the evil god who gave Juggernaut his powers was displeased by his servant's kinder, gentler personality and was slowly removing his powers. He later made a Face-Heel Turn and is now scaled back up to his full power.
The few times that Magneto's daughter, the Scarlet Witch, has gone insane and became evil, she turned into a force of nature. When she's a hero, her abilities wax and wane Depending on the Writer.
It must be a genetic thing. When Magneto's other daughter, Polaris, first showed up as a Brainwashed and Crazy villain, she was as powerful as Magneto himself. After she snapped out of it and joined the X-Men - not so much.
Quicksilver gets the short end of the stick powers-wise among his family, but he was a match for entire teams during the time Maximus was screwing with his mind. As an Avenger, it's hard to imagine. (However, in his early appearances, he wasn't that powerful as a member of the Brotherhood.)
Spider-Man villain the Molten Man. MM was a pretty tough villain for Spidey but when he reformed, he was often at the receiving end of beatings from the aforementioned Harry Osborn during his more villainous days (they were brothers-in-law). These beatings were pretty one-sided, defying Molten Man's past showings.
The USAgent first showed up in Captain America and while he was not a full fledged Big Bad, he was still an Anti-Hero with shades of Sociopathic Hero due to mental tampering. In this state, he was a stronger and more aggressive version of Captain America who had a great deal of trouble bringing him down. Once USAgent calmed down a little, joined The Avengers, and became more of a standard hero, he was quickly turned into Captain America-lite. In one issue, Captain America was implied to be stronger despite USAgent having Super Strength as opposed to Cap who is "simply" peak human.
Damian Wayne the fifthRobin got this when he became a good guy, since he was raised and trained as an assassin by his mother and Batman's strict adherence to Thou Shalt Not Kill renders most of his former strategies moot; though he's still as strong and smart as he's always been, he's still a ten year old who will have issues against supervillains like say, Killer Croc and Bane.
One of the worst examples of this is in the James Bond film Diamonds Are Forever. The main Bond girl is Tiffany Case, a professional diamond smuggler. In the first half of the film, she's shown to be a seasoned pro, good at her criminal work, with enough authority to even have her own henchmen. Late in the film, she successfully (and cleverly) eludes a crowded auditorium loaded with CIA agents ready to arrest her. After she turns good, her brains go south, particularly over a mix-up with cassette tapes. This prompts both Bond and Blofeld to make snide remarks about what an "idiot" she is.
Godzilla villain King Ghidorah, despite significant Villain Decay over the years (it used to take 2-3 monsters just to stand a chance against him), still generally managed to put up a good fight against Godzilla (even in the Hesei film, he managed to strangle Godzilla until soap suds came out). But in Godzilla, Mothra, King Ghidorah: Giant Monsters All-Out Attack!, he was one of the good monsters; and got profoundly curbstomped. Then he came back from the dead stronger, and got curbstomped, AGAIN. Then he came back, even stronger, and he got curbstomped a third time. Justified in that originally, lower-tier monsters were supposed to be used in place of Ghidora and Mothra, but Toho execs wanted to use their most popular monsters.
Hellbound: Hellraiser II presents an extremely glaring example. Near the climax, the heroine talks the four main Cenobites of the previous film- including Pinhead, the series' most popular villain- into a Heel-Face Turn by reminding them they were once human. Minutes later, they are unceremoniously Curb Stomped by a newly-converted and thoroughly evil Cenobite. The screenwriter received so much hate mail over this, he wound up invoking Worf Had the Flu.
In Xanth, the Dastard is one of the smartest and most powerful villains in the books. Then he gets his soul back, turns good and gets his original talent of having bad ideas back.
While "redemption" is probably overstating the matter, Lady in the Black Company novels is a lot less powerful as a protagonist than she ever was as an Evil Overlord. Justified because her reign was ended by her being Brought Down to Normal, meaning that she pretty much had to relearn all of her magical skills from scratch during the books where she was a main character. That said, once she regains a certain level of power she's still the most powerful individual protagonist, even if she's a lot less of a heavyweight than she was though leeching power off Kina probably helped.
Inverted in The Chronicles of Prydain. Achren was once Queen of all Prydain and, after losing the throne, remained a pretty powerful sorceress. She took a hit to her powers after Taran and Eilonwy inadvertently collapse her stronghold, then loses all of her powers completely a few books later, when her attempt to brainwash Eilonwy and steal her ancestral magic failed. She attempts to kill herself but Gwydion urges her to continue onward in life. With nowhere else to go, she becomes a servant at Caer Dalben and joins the good guys (or at least in the sense that she tolerates them and is grateful for their help).
Live Action TV
Power Rangers, every single time they did the "evil ranger" plot. The original Green Ranger nearly killed the heroes, even in five-against-one fights, but the second he switched sides, he was weakened immensely. Ditto the Titanium Ranger, the Wild Force Wolf Ranger, the Thunder Rangers, and Dino Thunder's White Ranger.
The Green Ranger actually got handled pretty well, mainly because he was basically only called when the going got tough (read: damn near every battle). The only real thing he lost was the power of darkness, and the reason for that is obvious. When he became the White Ranger though...
Justified with the Wildforce's Wolf Ranger, as his backstory showed he had a ranger-like form in the past that was no weaker or stronger than the other five; but had used a demonic artifact to grow stronger in a Godzilla Threshold scenario. It was the power of this artifact when added to his ranger powers that made him so strong when he was evil. When he became good again, is artifact driven power-up was lost and he reverted to his original ranger powers
Dino Thunder is an odd duck, since in the source material, the White Ranger (Abarekiller) technically never joined the heroes. Thus, Dino Thunder had to resort to the plot of an Evil Twin to justify all the footage where he fought the Rangers despite their version being forced to join the good guys earlier via Executive Meddling. Also his super-powerful Dino Gem was driving him evil, but when he was punished by the Big Bad via an energy draining device, weakening the gem led to him returning to normal... with powers reduced to standard Ranger level.
It should be noted that when the Sixth Ranger is good upon introduction, it's no different. He schools whatever enemy the starting five Rangers couldn't beat, looks awesome doing it, and it will continue in the next episode as we are getting properly introduced to the character. Immediately after that, he's no stronger than any of the main five, and is often even subjected to The Worf Effect.
Wolfram & Hart create a diversion to distract Angel while they extract vital information from Lorne's mind. Angel completely falls for this ruse despite its similarity to one that Angelus used on Buffy in "Becoming". Indeed, Angelus often seems a bit more clever than Angel. A lampshade was hung on this in Season 4, with Cordelia observing that Angelus is "smart" and Angel taking umbrage, and Wesley (the guy employed to be smart) outright states that Angelus is smarter than him.
Connor personified this. As a conflicted character, he was constantly switching sides; when fighting at his father's side he was a bit slower than Angel and not as agile, but when he fought against the good guys he was like Spider-Man with a cause, decking multiple foes with each blow and always one step ahead.
Illyria, when she was first introduced, seemed as if she'd be the Big Bad of the 5th season, downright godlike in her invincibility. Wolfram and Hart, the main villains of the entire series, were collectively so weak in comparison as to be like insects to her. There were other characters in Buffy the Vampire Slayer and Angel who were actual gods, and Illyria could've overpowered any of them. Basically, she was Cthulhu in a cute human girl's body. But when she ended up more or less on the heroes' side, it's oh-so-coincidentally revealed that her new, human body can't handle that level of power, and she gets powered down to the point that a minion of Wolfram and Hart is able to beat her into the ground.
Spike's fall was so severe that Badass Decay was originally named after him. Eventually Buffy tells him "I want the Spike who's dangerous, the Spike who tried to kill me when we first met." She more-or-less gets him for the remainder of the series, as by then the Sorting Algorithm of Evil has rendered him no-longer overpowered.
A particularly weird example occurs in Heroes. Peter and Sylar are both immensely powerful, but it's dealt with by keeping Sylar as a villain and handing Peter the Idiot Ball. When Sylar was given a Heel-Face Turn, the writers suddenly noticed the trope and turned him back in order to hijack the plot. As of the season 4 finale, they tried to redeem Sylar again, and started angsting about getting rid of his powers.
Castiel suffered this in Supernatural's fifth season. The show justified it by claiming that his powers were diminishing due to being cut off from Heaven.
Allan-a-Dale from Robin Hood became a lot less smart once he joined Guy of Gisborne and the Sheriff. The outlaws still managed to run rings around them, even though they were still using the techniques that Allan was familiar with. Of course, you could argue that Allan was deliberately sabotaging himself for the sake of his former friends...
The flipside of this is that a wrestler who was able to get clean wins as a face will only be able to win by cheating after a Face-Heel Turn. Reputedly lampshaded by Ric Flair, who said he didn't cheat because he needed to, but because he could.
Also lampshaded by Sting in the dying days of WCW who, after years of everyone in his life turning on him, finally got ahead of the game by seeing Elizabeth's Face-Heel Turn on him from the same million miles away that the audience did.
Subverted and played straight at the same time when Sting was exiled from the Main Event Mafia in TNA. He offered MEM member Kevin Nash a ball bat and turned his back, testing whether or not Nash would have the courage or lack thereof to hit him from behind. Sting had a second ball bat concealed in his trench coat which he used on the Mafia when Nash was about to swing. Trope is still played straight in the fact that Sting was still in a six-on-one situation and when the Mafia got the advantage, they had TWO baseball bats to use on Sting.
When a monster heel is brought into the company, he wins nearly every match, with many of them being squash matches. After his face turn, he will become easier to beat and his win/loss record will show that (e.g. Yokozuna, Vader, Great Khali, Mark Henry, Vladmir Kozlov, Ezekiel Jackson.)
Magic: The Gathering: Rhys the Exiled is a powerful elf from Lorwyn. Following the Aurora, which converts Lorwyn into the bleak Shadowmoor, he becomes Rhys the Redeemed, with significantly reduced strength and durability. (Although it has to be admitted he does have some interesting, potentially very powerful abilities.)
Dungeons & Dragons 3rd Edition: Normally, monstrous creatures (or just atypically powerful races) suited for use as player characters have "Level Adjustment", a number of "virtual" levels to count them as already having (added on to their racial hit dice) before adding class levels, to balance their innate prowess. In many cases, however, monsters' LA is badly overestimated. They often would have gained much more by an equivalent number of levels in an actual character class, meaning that when controlled by players, they often are very weak for the party's level. This problem can be exacerbated by racial hit dice, which provide the monster's core abilities (hit points, attack bonus, etc.) and count as effective levels, since they provide no other direct benefits and some racial HD types are vastly superior to others. Under-estimated LA, and/or very powerful HD types (dragons, outsiders, and magical beasts being strong contenders), and/or good synergy with class features can cause this to be inverted.
More directly exemplified in the "Savage Species" supplement, which introduced an alternative to make monsters playable at low levels, by allowing you to gradually earn the abilities represented by a monster's level adjustment by gaining levels as a monster instead of in a character class. In short, the creature is intentionally demoted to bring them theoretically on par with normal characters, gaining portions of their full innate power instead of class levels. The aforementioned level adjustment just causes the monster to gain less than a conventional character might have, rather than actually demoting it.
In Heroes of Might and Magic V an infernal general Agrael in the end of his campaign decides that he had enough of his demonic masters, bails and switches to being a Warlock (well, the best he could get in his condition and he turns out quite a nice guy for a Dark Elf). Naturally, he loses all his abilities, even not demon-related, and levels of experience in the process and has to start evolving from scratch. Explained in-story as the effect of the ritual that purified him of demon taint.
The same happens earlier, at the start of his own campaign: formerly a formidable hero in Isabel's campaign, he is suddenly brought down to level 1. There is no story justification here.
Agrael: How sad it is that I, the ultimate servant of evil and commander of the demon invasion, is reduced to weak buffoonery as soon as control is given to the player.
Acknowledged in universe, and justified, in Forever's End When Elsie, who had very recently been a boss that took on three characters at once, joins the party she warns that her magic is weaker now 'for some reason' It's later revealed to be a side effect of the main villian's attempt to tap into her powers and separate her from the crystal
One of the more extreme examples is in Original Generation 2, where a boss character who pulls a Heel-Face Turn goes from having 100,000 HP to 5,500 - in the middle of a battle.
Subversion in Super Robot Wars Reversal (SRWR). After fighting the rival robot of Gear Fighter Dendou, Gear Fighter Ogre, you can get it and it's stats will go down. But if during a route split you choose to fight the possessed Subaru who is using Ogre, after the battle you get him back and find out that the bad guys put Ogre back to the stats it had before, and you get to keep them this time. Also includes a Lampshade Hanging: if you're able to rescue Master Asia and revive him with Shin Getter Robo, they rebuild Master Gundam for him to use, though Rain points out that it isn't as strong as his original Master Gundam (which was not only DG Cell-powered, but also a boss unit in other games.)
In Super Robot Wars J with Johnny and Yuu's sister from Brainpowerd, who's Barons are more powerful than all but Nelly Brain, but are nowhere near the 60k they exhibited as bosses.
Played straight in the inverse in Super Robot Wars Original Generation when Ingram pulls his Face-Heel Turn and steals the R-Gun to boot. The machine's stats are way higher than they were five seconds ago when you were using it.
Played depressingly straight in the true final stage Super Robot Wars W. After Critic deposes Inference and takes control of the Sapientia, Applicant shows up in the Val Arm to give you a hand. Naturally, the machine is many times worse in every respect than it was as the final boss of the previous stage, and Applicant himself is demoted as well, with lowered stats, fewer abilities, and missing his Double Move skill as well as his face cut-in. Also, he gains Main Character status and is not allowed to die. Oi.
Folka in OG Gaiden plays around with this. As a boss he has well over 100,000 HP taking very long to kill but only has two relatively weak basic attacks so he's no real threat to your guys. Upon joining you his HP drops to the PC average of 6,000 but he also unlocks his incredibly powerful Fist of the North star type attacks (which he seemingly could always use but just didn't feel like it as a bad guy) causing him to do insane amounts of damage.
It's even more notable with Roze, Anew, and Kagura who don't even get to keep their units in the Super Robot Wars Z series. Roze and Anew are demoted to subpilots, and while for Anew this isn't that big a deal, Roze has higher stats than the main pilot of the Cosmo Crusher AND like Takeru has the ESP ability but is none the less forced to be Kenji's SP tank instead. Kagura at least gets to pilot, but he's a melee character as his brutal attacks as an enemy show, and despite having two different powerful melee centric units as an enemy, as a PC he's forced into the Aquarion Gepard, which has only ranged attacks, making his stats totally wasted. Averted with Jin, who like Kagura loses his Abductor unit in favor of Gepard, because his stats suit it anyway.
Kurtis in Disgaea is a ruthless boss (with a matching level), but when he eventually joins your team, he becomes much less effective. Probably because dying and coming back as a Prinny takes a lot out of you. On the other hand he does have all of the abilities he previously had, as well as Pringer Beam, and like any character he can be built back up to his old level.
Maderas and Hoggmeiser have considerably more HP as bosses.
Justified in Disgaea 2, where such a Heel-Face Turn was the result of a loss in power by pseudo-antagonist Etna. Even then, she only hangs around the protagonist and his entourage until she regains her former power (descriptions of which are rife with fourth-wall breakage).
Present in Disgaea 3 DLC characters. You're prompted to fight them before they actually become playable, and while facing them as enemies, they sport very strong and rare weaponry, have the strongest weapon skills at their hand and have between 10.000 to 25.000 HP to boot. Once they become playable, they lose all their equipment, lose all of their weapon skills and their HP is cut down to an average of 3.000. Though as in the prior two games, once the character in question is yours, you can train the character back up and give them equipment that far outranks whatever they had as a boss. And when you eventually cycle back through the game and acquire them again, they'll be at the same level with all their gear.
Every secret character you can get in Makai Kingdom is high or very high level (with the exception of Asagi, who is only level 50) when you have to fight them, but drop to level 1 and lose their stuff when they join you. Makes sense for several of the Overlords (as you're actually gaining a "phantom copy" of them), but not for Laharl and company, who join as themselves. Even the Robosuit reverts to level 1 after you claim it.
Hot-Blooded Matsu from .hack//G.U. is an Adept Rogue, with the ability to use Broadswords and Steam Guns, the former being his preferred weapon from his Player killing days. However, when he joins Moon Tree, he becomes a pacifist and stops using it. When you get his member address to call him into your party, he can still only equip Steam Guns. The problem here is that Adept Rogues learn moves for their chosen weapon classes at a slower rate because their actual strength is their ability to use multiple weapons, so Matsu is essentially an extremely weak Steam Gunner in comparison to your other, actual Steam Gunner (though he has the ability to equip heavy armor, something steam gunners can't do).
Tales of Symphonia has a few rather blatant examples of this with Kratos, Sheena and Regal, with Kratos' actually happening in reverse order. What makes it strange is that Kratos Aurion is fought both in a normal and solo fight, and when fought solo, Lloyd tells him not to hold anything back, but he not only has only 1/4 the HP he has in the normal boss fights, but appears to have taken considerably more damage when the fight is over.
Potentially even worse than the above is Zelos; if you choose the Kratos path, you end up in a boss fight against Zelos. Despite the fact that he was in your party two minutes ago, he's suddenly got five-digit HP and tons of kickass moves. A handwave is attempted by the fact that he's now using angel powers, which he doesn't do with the party, but it's still jarring.
Sheena also loses the ability to use the various guardian summons that made her boss battles so difficult. It's implied in one cutscene that she had a very limited number of those guardians, and has used them all up by the time she joins the party permanently.
Tales of Destiny pits you against Leon Magnus, a genius swordsman who is tasked with kicking the snot out of the hero and his party. Given that this happens within the first few hours of the game, the party isn't even near the level needed to wear down his 9999 health points and survive his attacks. However, once he joins you, his level and stats are barely any higher than those of your other characters. And of course, when he turns against the party halfway through the game, he suddenly gets a whopping five digit health and access to moves that the party member version didn't. The Remake gives this more of a realism by reducing the boss version's HP and statistics to around what they should be when he joins the party, and instead just made him literally unbeatable.
Flynn of Tales of Vesperia is an odd example — although he's not evil in the slightest. In the one instance when he joins you in combat, he has somewhere around 5000 HP and a paltry amount of Artes. Approximately one day later in the game's timeline, he and Yuri duke it out — and he's suddenly gained six-digit HP and a repertoire of deadly Artes, including Holy Lance and a Mystic Arte, Radiant Dragon Fang. He must've done a buttload of Level Grinding in that one day.
Captain Schwann exemplifies both this trope and Evil Is Cool. As a boss, he's incredibly difficult (although most of the difficulty comes from the fact that both your healers are absent from the party), has six-digit health, and extremely powerful techniques. He's missing most of those techniques and is back down to four-digit health when he rejoins the party not much later as Raven. Justified in that he's using his Dangerous Forbidden Technique (his blastia heart) during the battle, andwielding his sword in the other hand.
In the PS3 remake the final team arena battle pits you against the party members you don't currently have with you. Not only do they have boss class hp and stats now, but they break the party size limit to attack you with ALL unused members making the match 4 against 5. The party seemingly puts more effort in friendly arena match than against the guys that want to destroy the world.
Lunar: Eternal Blue has this with Leo... but averts it in that Leo appears to be Level Grinding at the same rate as the protagonist, and when they duel one on one, Leo only has about 288 HP... around the same as he did when they teamed up. But the PlayStation version undoes this by giving Leo about 750 HP for the duel.
Zero from the Mega Man X games is at his most powerful when he's fighting against the player: he even has access to moves that the playable Zero is never able to use. In X2, he was rebuilt with the ability to charge his saber and both busters. He remains this powerful throughout X3, and "loses" power in X4 in exchange for not, y'know, needing to charge his guns up every time he wants to fire. In X5, Zero is empowered by the Maverick Virus, as he is the original carrier of the virus and designed to be at his most powerful under its influence. The player finally gets to use Zero's boss moves after defeating Bonus BossOmega (oh, and clearing the game) in Mega Man ZX. It is GLORIOUS.
Seen also in Mega Man Powered Up, if playing as one of the other robots. In the place of The robot master you're playing as, you'll fight against an evil Mega Man wearing a purple scarf. He can charge his buster, Slide, and is quite the pain in the ass.
Similarly, in fellow Capcom game Devil May Cry 3, the playable version of Vergil (accessible in the Special Edition) lacks moves that the boss version can do. However, playable Vergil does get some moves his boss incarnations don't, and the series also tends to make Dante, the hero, far more Badass than any evil counterpart.
Variation: One of the drama CDs of Guilty Gear depicts an Alternate Universe in which the character Dizzy — a sweet, innocent Friend to All Living Things in the games — inherits the title of Big Bad from her mother. In the games, she's more or less toe-to-toe with the rest of the characters (sort of), partly because she's trying to suppress her powers so she doesn't hurt anyone — although this doesn't seem to change drastically when she goes berserk in the third game. In the Alternate Universe, she single handedly destroys a fleet of airships using one move.
Nitros, from the game Bomberman Hero. During the game, he's quite a hard guy to defeat, using all kinds of weird powers. But at one point, after you defeat him, he realizes he's been brainwashed and adds his power to yours. But do you get any special board-game based attacks? Nope, you get to lay more bombs. The funny thing here is that you'd have to be more powerful than him to defeat him in the first place. Also, as soon as you next die or turn off the game, you lose all that power. And you don't get any power from beating him another time replaying the level - it only happens when you first trigger the cutscene.
In Ultima VII Part II, Selina the sorceress briefly joins with you early in the quest, is absolutely worthless at doing anything, and teleports out when the going gets tough. Later on, she turns up as an antagonist, and is surprisingly effective at that.
In Arc The Lad: Twilight of the Spirits, Tatjana as well as many of Darc's allies have this to some extent, but many of them have just had no real affiliation with the villains before meeting Darc, and Tatjana had merely been betrayed as a wake-up call. Tatjana is seen as one of Dilzweld's commanders and is capable of mutating a deimos into a state where it is completely unrecognizable. She is also fought as an enemy on Darc's side, but it is revealed that a lot of her power comes from having her advanced science (that is not portable) and from being able to command soldiers, since when she is a guest-party member in Kharg's group at first she is easily picked off by the boss monsters unless saved.
There is also another part in which you have to fight the opposing party. Of course they are about as strong as they were when you left them off.
Subverted in Zone of the Enders Fist Of Mars: It's possible for the villain's cohort to Heel-Face Turn, and although she loses her powerful boss mech, she still maintains her well-above-par stats. On the good path, you can recruit someone in a boss mech with an absurd amount of hp (20000, when the others have like 5000) and strong attacks, and in the next fight she will be at full strength. Although she'll have trouble hitting the fast final boss, she will take a ridiculous amount of attacks and OHKO the minions. Also, this game subverts Evil Is Cool.
In Fire Emblem 7, Vaida is an enemy with greatly increased stats, the boss of a "survive" mission (i.e., you don't have to kill her to win, so don't even try because she has at least + 5 to every stat). When she joins a mission later, she is thoroughly mediocre. Justified in that she was powered up by the Big Bad's magic. In an unintentional subversion, the player can use a glitch to steal Vaida's Spear, the item that was coded to increase all of her stats (dubbed the "uber spear" by fangroups), and give it back to her in the next mission, allowing her to retain her beastly stats even while Good.
Similar: In Puzzle Quest: Challenge Of The Warlords, you'll often find that after capturing an opponent, the uber-spell you were hoping to learn from it isn't available. (for instance, you can't learn Deathsting from the Giant Wasp or Breathe Ice from the Frost Dragon). Also, since the mana costs of learned spells are 50% higher than from "natural" use, often you won't have enough of a certain level to use it, even with full mana levels (Ex: You need 30 Blue Mana to use the Call The Horde spell, but Orc Lords only need 20) or the cost per attack isn't worth it (Rend is deadly in the hands of a Wyvern, not so much in yours).
Justified in The Legend of Spyro: A New Beginning. The villain for almost the entire game, Cynder, is actually a baby dragon, mutated into a powerful adult-like form by the powers of the actual main villain. Once she is defeated, she is cut off from these powers and reverts to her natural younger-looking, weaker, and much less badass form. She remains in this form throughout the ending and subsequent Spyro games, where she is a protagonist.
Though most of her stats are dependent on her equipment. If you bring along a lot of spare pieces you can remove everything from Beatrix but her sword, allowing you to turn Steiner into a powerhouse while Beatrix becomes much like any other character.
In Final Fantasy VIII, Edea the Evil Uber-Hot Gothy Witch Queen Fetish Fuel chick is the Big Bad of the first act — and turns into a rather weak playable character thereafter (additionally no longer ruling the world). The reason she becomes good in the first place is that she loses all her sorceress powers which made her powerful (and brainwashed) to Rinoa, thus making her a normal human being. When Squall tries to physically stop the brainwashed Rinoa from leaving the lunar base, he gets launched into the nearest wall. However, when you get Rinoa back, she isn't one bit more powerful than before (except for having a new Limit Break).
In Kingdom Hearts: Chain of Memories and Kingdom Hearts II, Riku loses most of the independence and ambition that he had when he was on the Dark Side, and leaves all the hero work to Sora (though he does regain his cool at the very end of Kingdom Hearts II, but still...)
The same can be said about Roxas, as when he is fought as an enemy in the No Export for You version, he's far more powerful than when you played as him.
Terra and later Lingering Sentiment in Birth By Sleep are missing most of the attacks that Lingering Sentiment would fight Sora with 12 years later in Kingdom Hearts II. (This goes both ways though as Terra has some nifty darkness based powers LS doesn't have in Kingdom Hearts II.) The only move you do get to use is the Keyblade cannon which is admittedly their coolest move. Oddly Terra can still transform his Keyblade into a vehicle mode to travel words but can't use it in battle, however Aqua and Ventus can use their Keyblade transports in battle making it an odd omission.
Lu Bu in Dynasty Warriors 2-6 — In one map he's a virtually unkillable super-armoured warrior in constant Musou Rage who can kill you in one or two hits. Then you unlock him and get the version balanced like everyone else (however, since he's so cool as the NPC version, most people will mac him out ASAP anyway — but he's STILL not as tough as the NPC version. Though if played well with pre-considered access to Musou Rages and the right balance of magic stuff, he can sometimes kill his other self—just barely.
Good luck getting Guan Yu to be as good as his Fan Castle iteration or Zhang Liao and Gan Ning to do the same for their He Fei forms. Generally if a general was famous for their actions at a specific battle they will get a huge power boost over their regular forms. This is even the case with Lu Bu; compare him at Hu Lao Gate to say Guan Du or the Imperial Seal and you'll notice a huge power difference.
Particularly bad in Castlevania III when you must fight two of you possible allies - Grant and Alucard - before they join your party. Not only do they take more hits and do more damage when you fight them, but they're significantly larger in size as well. Justified in the case of Grant as he's been turned into a ghoul when you fight him.
Partial exception: Destiny of an Emperor allows the player to recruit bosses at their full strength. However, since the main PCs gain soldiers (the game's equivalent of HP) over the course of the game and the bosses (and less important allies) don't, the bosses-turned-allies eventually become worthless. Except Zhou Yu.
Justified by Sarevok in Baldur's Gate II: Throne of Bhaal. When he finally does join your party after having previously opposed you he has lost all of his Bhaalspawn gifts and equipment in the meantime (being dead will do that to you), not to mention that his experience has been static ever since and allowed you to close the level gap between you as well. He is still the best fighter NPC in the game despite this.
Lampshaded and mercilessly parodied in the Affectionate Parody game Jays Journey, where after the player defeats Shade the Ninja, Shade and Jay realize that they're actually on the same side. Upon joining the heroes' team, Shade loses a ton of hit points, can no longer cast the Dark 2 spell, and drops one sword, causing Jay to gripe. Shade can eventually get the spell and second weapon back, but those boss-level HP are gone for good.
Final Fantasy Tactics A2 does this with Adelle when she is brainwashed by the Big Bad. Adelle leaves the clan at one point and when that character gets brainwashed, their level skyrockets to 44 (or levels down if you spent a lot of time Level Grinding) and they have some awesome equipment. When you get them back, they revert back to the level they was before they left you, goes back to the job you were raising them has, and all the items she they in the battle are not kept. Subverted in that not only the job and power she had during this fight becomes available few time after she came back, but she also gets more of them, gradually turning her into something close to a Game Breaker.
Fighting and beating Al-Cid plays this trope straight. Al-Cid is a pretty strong opponent, but when he joins your party, he comes in several levels lower than he was when you fought him previously.
There are several missions where the leaders of Duelhorn, Marquis and Alyss, join you a few times as a guest unit. When you face against them, they are quite powerful and dangerous. When they join your side for a while, they simply don't use their powers and opt to just stick to melee attacks or use abilities that are useless. However, when you fight against them afterwards, they go back to being powerful.
Some versions of Final Fantasy IV did this unintentionally. When Cecil converts from a Dark Knight to a Paladin, he has to fight Dark Knight Cecil as a Paladin. The Dark Knight Cecil uses Dark Wave every turn, but that attack was removed from the Easytype version (which was also the version that was released as Final Fantasy II on the Super Nintendo in the US), leading players of those versions to wonder why Dark Knights could shoot energy beams all of a sudden. Cecil also goes down to Level 1 as a Paladin, but starts with around 600 HP and quickly gains levels and statistic points; a level 1 Paladin Cecil is nearly, if not as good as a level 20 Dark Knight Cecil.
When he's evil, Golbez takes a Meteor to the face and shrugs it off, can almost one-shot Cecil's entire party, and manages to regenerate his entire body from just a hand. After his Heel-Face Turn, he's left with just 2,943 HP. His HP actually goes up in Final Fantasy IV: The After Years, seemingly subverting this... but, in the process, he goes from over 500 MP to only 230.
Justified In The World Ends with You when Beat decides to joins Neku's side after all other options of Neku's survival was destroyed. As a consequence he was kicked out of the Reapers, simultaneously losing all of the power that made him near impossible to beat.
An extremely egregious example in Final Fantasy V: when you fight the summon Carbuncle, he is a huge gorilla-like beast with terrible fangs, deadly attacks and a vicious temper. You beat him, gain the power to summon him, and when you're ready to use him to thrash over your enemies... you discover that he's turned into a tiny green mouthless squirrel thing that can only cast support magic. And he will continue like that for the rest of the series.
Mostly averted in Luminous Arc. Boss characters are simply a few levels higher and better equipped than you, but keep their stats, and equipment (which is genereally on par with yours by the time they join). However any character who could summon monsters won't be able to do so when they switch sides.
Perspective flipped in Overlord II with Queen Fay. In her appearances as a hero she possesses magical powers such as teleportation, but shows no magic whatsoever after becoming your mistress following her Face-Heel Turn. Justified in that turning evil was a side effect of you draining her powers to recharge your Tower Heart, and the Tower Heart has also consumed every drop of magic in the entire Sanctuary, so that by the time Fay is converted she's literally out of juice.
Ace Combat Zero, where Solo Wing Pixy's ADFX-02 Morgan has all three special weapons equipped without needing to RTB to change, albeit in phases, and has a far more potent ECM system than Cipher's ADFX-01 copy has. Also Ace Combat 6, where Ilya Pasternak's usage of the CFA-44 Nosferatu comes with a bunch of attendant drones, whereas Talisman's doesn't. In X, the playable Fenrir lacks the High Powered Microwave Cannon and Digital Optic Stealth of the enemy versions, though there's a throwaway line or two about being incomplete.
Played to a T in Shining Force 2. Jaro joins you mid-battle...and loses stats because he was tired of working for the Devils.
Yuffie in Final Fantasy VII has several unique and powerful attacks when you first encounter her, but upon joining your party she loses those abilities and becomes a normal character. However she'll eventually become far more powerful in your party than her random encounter version ever was.
Final Fantasy X has Seymour to a degree; a while after you see him shredding all of those fiends with Anima, he'll join your party for a single bossfight. While very powerful, more so than your characters will be at this stage, he can't summon Anima and isn't nearly as powerful as when you fight him for the first time not too long afterwards. So he loses power when joining the good guys, it just happens he does this before being revealed as a bad guy.
In Final Fantasy XII, a Guest Star Party Member pulls a Face-Heel Turn on your party at one point and is much more powerful and durable when you face him in an inevitable boss fight than he was when he was on your side. However, other than gaining passive abilities when he Turns Red, he doesn't pull anything you haven't seen before. All of his attacks are the same ones he had when he was helping you, they just do significantly more damage.
There is also Judge Gabranth, The Dragon to Vayne for much of the game, who pulls a Heel-Face Turn and assists your party during one portion of the Final Boss fight against Vayne. His health and strength levels are significantly lower when he's helping you than they were during the two boss fights when he fought against you earlier in the game. Justified, though, as the second boss fight against him happens only a few minutes earlier. So when he comes to your aid, he's still weakened from the beating he just received by your hand.
The Espers also bear mentioning, particularly the optional ones that the player does not automatically receive during the main storyline, who are among some of the toughest boss fights in the game. After you beat them, they become available as summonable allies. While they are fairly powerful when summoned, it is nowhere near the degree that they were during the boss fights.
Zawu of Last Scenario had the ability to summon a troublesome boss, appear and disappear at the most convenient of times (passing through unwalkable tiles), and could even deal quite a bit of damage when you finally fight her. She was already a competent soldier when two of the main characters were just little children. And then she joins your party...
Sturm from Advance Wars, an unlockable CO upon completion of the campaign. In the campaign, his units have 120% attack and 90% defense, while his CO power is to call a meteor down from the sky, doing up to 8 or 9 damage to all enemy units in the blast radius. The dev team (perhaps understandably) found this grossly overpowered, so in multiplayer, his units have 90% atk/120% def, and the damage from his meteor power is cut in half. Averted in Advance Wars 2 though where Sturm becomes even more powerful, and isn't nerfed at all in multiplayer. If you choose his character, your friends will hate you.
Twisted Metal: The playable versions of Minion in every incarnation are about half the size, have no force fields, lower life, weaker weapons, etc.
Every Touhou game, in which player characters only have access to a small number of their available Spell Cards, which are also drastically reduced in both power and duration compared to when they were antagonists. The regular games are more a case of mechanic asymmetry; the "boss version's" hit points are traded for mobility and evasion, and the variety of spell cards are replaced by supercharged regular attacks and a couple of equally upgraded cards (you can theoretically dodge any boss's attack or spell card; they generally can't avoid any of yours). The fighting games, however, play this trope straight for any character you have to unlock, as most of the challenge in the single-player story mode is learning how to dodge and shut down the various unlimited-duration, amped-up spell cards the AI characters invoke and spam between bouts of regular fighting.
In Persona 4, Personas are created out of Shadows when the person in question accepts their "true self". While the transformation makes the spiritual entity loyal and controllable, it also decreases their stamina at least a hundredfold, eliminates all their cool attacks, reduces them in physical size, and decreases their attack power. This is justified by Teddie's explanation that a strong-willed Shadow draws others to it to form a big mass of Shadows, and they make up the form you fight in the boss battle. So you're really fighting several Shadows combined in the boss battle, whereas when the character gets his Persona, it's only made up of a single Shadow.
In Mario & Luigi: Bowser's Inside Story, this happens in the middle of the game. Bowser, who you had previously been controlling, fights the Mario Bros as a boss. He has increased HP, increased Attack, and the ability to target both brothers with a move which normally targets one opponent.
Pretty much every legendary you can recruit. By hacking the data it is possible to see that you actually get a copy of the recruitable boss upon defeating it. The boss version has higher stats in all areas, but most notably HP. They have 500 to 900% more HP than the playable copy you get.
The most egregious example in the first pair of games is Rayquaza: the climax hinges on Rayquaza having a Hyper Beam attack strong enough to destroy an incoming meteorite big enough to destroy the Poképlanet, but doesn't know Hyper Beam yet when you recruit it.
Common recruitable Pokémon also suffer this: as enemies they have 300 to 600 IQ points, but once recruited they lose all the IQ points and all the IQ skills learned.
Chrono Cross has several examples, due to the incredibly huge number of characters you can recruit. Probably the biggest example is Grobyc. As a boss, he has thousands of hit points and attacks that can annihilate your entire party repeatedly. Afterwards, he has the usual 400 or so HP and can no longer use the oh-so-broken Vigora.
Xenogears. When you first meet Rico, you have to fight him in the arena and he does 5 digit damage to you per attack (an instant kill a hundred times over). When he joins you, he turns out to be pretty pedestrian.
Inverted example in Exit Fate: when you defeat Vanrushal the vampire, the damage drains his power and leaves him on a "mere" human level. Since he finds you interesting and, more importantly, cannot stay at his monster-filled mansion like this, he joins your army instead. In other words, his demotion causes him to join you, not the other way around.
Inverted and played normally in Baten Kaitos over the course of a single battle: one of your party members pretends to switch sides in order to get the rest of the party to "test your strength," rejoining the party after that battle. The party member has 3300 hit points during this battle. Now, the mechanics of the game are such that bosses don't have all that many more HP than the party members (the ratio is more like 3:1 rather than 20:1), and this party member will actually reach 3300+ HP in the course of the game (assuming you level her up), but at the time when this pitched battle occurs, it's still more than the high-three-digit HP values your party will probably have at that point in the story.
Justified in Neverwinter Nights 2: by the point Ammon Jerro joins you, he has just been stripped of his incredible power as a result of Shandra freeing the bound demons that powered him.
Inverted in the first two X-COM games. Your mooks are inaccurate (even with training) and stupid... but when they get their brains sucked out and replaced with green alien goo they become much more capable, accurate and dangerous. "Durrr, I'm shooting at something I can't even see on the other side of a bookshelf, and ignoring the thing sneaking up on me." (wet slurping noises) "Boom, Headshot! Boom, Headshot! Boom, Headshot!"
Lampshaded in Cthulhu Saves the World, where Sharp's in-combat description is "Has a much higher max HP now than he will in a couple minutes." Also inverted, as he initially sees Cthulhu as the villain (With good reason).
In Sonny, Felicity is an early-game boss battle, with 2500 HP. When she joins you at end game, she has... 2500 HP. Which wouldn't seem too bad, except you and your enemies will probably be doing about 1500 damage per hit, not counting special attacks, making her an ultra-brittle Glass Cannon.
During the Legion of the Damned campaign in Disciples2, the demon general Asteroth is pretty beefy in the mission you control him — about 500 hitpoints, and the ability to attack twice for 99 damage a pop each turn. In the next mission, Uther stops pretending to be Bethrezen and decides he doesn't need you anymore, and Asteroth sides with Uther. As an enemy Asteroth has twice as much health and attack power and is able to lead a couple other units in his party. In both situations Asteroth remains evil. Too bad being evil doesn't mean you're on the same side.
The U.S. Military in general in the Dead Rising series. In the first game, their response to the zombie outbreak consisted of dozens of heavily armed, well trained, Gas Mask Mooks who methodically and efficiently swept through the mall, easily disposing of all the zombies. They also used air support in the form of Blackhawks, which strafed zombie crowds with their machine guns, and actual tactics, such as remembering that they have guns and firing on the zombies from the roof. They even sent at least one tank. In the second game, their response consists of two eight man rescue teams, with no armor or air support, who just blindly rush in. Predictably, they get slaughtered. Sure, the zombies they were fighting were more dangerous than the ones that the last game's soldiers were fighting, but their new abilities wouldn't have mattered at all if the U.S. Military had the same response they did in the first game.
Sabata from the Boktai series gets a serious downgrade in power when he switches to his brother's side, and gets a downright obsene power boost when he goes back to the Immortal's side. It's Hand Waved by fans that since his power is dark-type and fueled by evil and hate, he naturally loses strength when he's using it for good.
When Gwynn first started learning magic in Sluggy Freelance, she was able to throw around spells like nobody's business in her quest to get payback on Riff. When she realizes she was wrong and tries to be a good person, she uses magic much less frequently. Justified since her powers come from the "Book of E-Ville."
In Dungeon Crawl Inc, hot drow cleric Teagan loses her magic powers after falling in love with Castor and siding with the heroes.
In Double-U Tea F, Raike goes from the Big Bad/Ganon of the series (Capable of taking on most of the heroes at once), to being one of the less effective heroes after his Heel-Face Turn and subsequent name change. However, looking back at his earlier appearances shows that when he isn't using Chaos Corruption, he has about the same level of power as his (Heroic) brothers, and may actually be slightly weaker (Understandable, given that he's the youngest of the three). It's just hard to notice due to the fact that he has precisely one fight scene where he doesn't use Chaos Corruption, and there's enough of a power gap between him and his opponents that he seems super strong by comparison. Not helping matters is the fact his final appearance before his Heel-Face Turn featured him Having his soul placed in an android body that was even stronger than his Chaos Corruption form, which he lost upon having his old body being restored at the end of the arc, which made his subsequent fight scenes make him look even weaker by comparison.
Poked fun at in RPG World, with the assassin Eikre. In Eikre's first appearance he saves the party from an unusually high level enemy by one-shotting it with his Top Cut technique. After joining the party he is inexplicably no longer capable of using the technique, much to his new allies' dismay.
Zuko lampshades this in Avatar: The Last Airbender when he joins the Gaang and briefly loses his firebending, speculating "I bet it's because I changed sides". He turns out to be right, as firebending is fueled by rage and desire, which for him previously revolved around capturing Aang. He then learns the ancient, original firebending technique which isn't powered by rage, and becomes a lot more powerful.
Scavenger in Transformers Armada was initially a quite a big threat, until he became an Autobot and started taking a lot of naps.
In Transformers: Beast Wars, Blackarachnia was notably less effective as a Maximal than she was as a Predacon, though more because of inner emotional distress than any explicit depowering.
In the Rankin-Bass holiday special Santa Claus Is Comin' to Town, the Winter Warlock appears as a villain with massive powers of weather control. After Kris Kringle uses The Power of Friendship to melt his icy heart, he later sadly explains his powers are now limited to a few novelty gimmicks (such as corn that makes reindeer fly).
In The Batman, the original Clayface, Ethan Bennett turns good and goes fighting a new clayface who has the exact same powers. Despite having three more years to practice with his powers, Bennett still loses miserably to the new clayface, who just got his power a few days ago. This had more to do with the new Clayface taking an ass-load more of the clay that mutated them than Bennett as he became infected intentionally. Also, unlike Bennett, Karlo didn't have to worry about losing control because he didn't care.
Ben 10's Evil Counterpart Kevin 11 undergoes this following his between-series Heel-Face Turn between Ben 10 and Ben 10: Alien Force. In the original series, he was a deadly enemy with the powers of Ben's 10 original aliens plus his own energy absorption powers (which he'd once used on the Omnitrix.) After the Time Skip, he is inexplicably not evil anymore, and his powers have just as inexplicably changed: he now absorbs matter, turning into any material he touches, Absorbing Man-lite. In this form, he suffers The Worf Effect to the point that we'd be calling it The Kevin Effect if the series had come along earlier. Waaaay later, we get the explanation: he can do matter and energy, but absorbing energy warps his mind. He has to stick to matter or he'll go evil again.
When opposing them, Amazo from Justice League was the most powerful being ever introduced who could brush off every superhero in existence with minimal effort. When he fought against Solomon Grundy on the JL's side with the intention of simply erasing him from existence, his attack only served to empower Grundy. Realizing this, Amazo backed off and retreated several light-years to come up with a new strategy. He was still thinking about what to do when the episode ended.
Hexadecimal from ReBoot. As a virus, she is the queen of chaos. As a sprite, she can't even fly. To save the system from the supervirus Daemon, she must power back up-which drives her right back into total insanity. Justified in that her transformation into a sprite took away most of her powers.
Tohru in Jackie Chan Adventures. In Season 1, he's The Brute among the villains and very much a Mighty Glacier who routinely tosses Jackie around like a ragdoll during fight scenes. At the beginning of Season 2, he pulls an abrupt Heel-Face Turn and becomes a Gentle Giant. Though he can still hold his own in a fight when needed and is always The Big Guy when teamed with Jackie and/or one of Jackie's other allies, these are few and far between and he's typically not portrayed as the overwhelming powerhouse that he was as a villain in Season 1.
Vision from The Avengers: Earth's Mightiest Heroes: As a villain he is able to take on multiple Avengers at once, easily trouncing them, phasing away from or getting too dense for every attack. As a hero- Frequently surprised and knocked down, despite clearly still demonstrating the abilities.