Jacob of Dominic Deegan is all over this trope. In the Visions of Doom arc, he was introduced as a near-unstoppable necromancer who fought a powerful spellwolf to a standstill, out-maneuvered his seer brother and manipulated an evil cult into conducting a dark ritual before killing them with ease so he could use their body parts to make a necromantic golem. Later, he and his golem tries to team up with the Chosen to unleash the Storm of Souls, but their plans are ultimately defeated and his own creation turns on him. He gains a bit of credibility by tearing off his own flesh, but never really regains the Badass status that he once held. In the most recent arc, he gets owned by Huk Thak/Roki, is murdered by the Shintula Chief and is finally betrayed once again by his servant Neilen and left to rot in the orc version of the afterlife. The character's future is uncertain but it's clear he'll never attain the coolness that he once had.
Update: as of the comic's end, Jacob came back to life, made amends with his family, helped them take on the ultimate Big Bad, and eventually absorbed and conquered the Blight so as to become a master of death as he had always wanted—but only by balancing it. So in the end he became badass again, but only because he stopped beinga villain.
This was done (probably deliberately) to Faz in Shortpacked! In his first appearances, he was an insufferable Smug Snake who managed to become Galasso's favorite employee via manipulation and undermining his coworkers all while rubbing it in their faces. Now he's the most pathetic member of the cast and treated as little more than a nuisance.
After Kelelder from Jix was killed the first time by Jix (though, this term is used loosely since he's an immortal), he's become somewhat of a Kenny type character. The creator didn't want him to be seen like this, so Kelelder made an agreement with another character to back off from the main character and stop trying to kill her.
In Schlock Mercenary the Partnership Collective came within a hair's width of killing off Tagon's Toughs three times in the comic's first year, the second two times with WMDs. But the third time they wrecked the Lunar Space Elevator and the government put a bounty on the Collective's Attorney Drones, now that the Toughs are paid to shoot them on sight they've become nothing more than comic relief.
Lampshaded in thisBrawl in the Family comic, where Bowser kidnaps Peach, and both Mario and her treat it like a mere inconvenience. The Alt Text rubs salt in the wound by saying "We look forward to teaming up with you the next time a real villain is in town!"
In Homestuck, Jack Noir has been suffering this as of late. Once an absurdly powerful Hero Killer who single-handedly destroyed the trolls' session and one-shot God Tier John before he could even make a move and took down Grimdark Rose, he's been getting gradually overshadowed by even more powerful villains, while the heroes have been getting more powerful as well, with John even going toe-to-toe with Jack and managing to score a hit on him.
Zig-zagged with Gamzee after his Freak Out. He spends a nice period of time being the most terrifying villain in the comic, then he calms down and becomes a mix of Token Evil Teammate and The Friend Nobody Likes, then he's revealed to be secretly working for Lord English, but then he spends a pretty large portion of his onscreen time after that being either filled with lead by Caliborn, being mind-controlled into being Aranea's minion, or performing seemingly-random acts of capriciousness like prototyping the Nobles' sprites with his friends' corpses, which never quite cross the threshold into threatening territory.
This is occurring in-universe to the Nightmare Knight and Disaster Masters in Cucumber Quest, due to having been summoned to play the Ultimate Evil in the same narrative (and inevitably lose) 100 times over thousands of years. Rosemaster states that in the beginning they caused massive destruction, but now they're just going through the motions, and most of her teammates (the ones who aren't too stupid to understand) are either resentful of their role or just as tired as she is.
Played for laughs in The Adventures of Dr. McNinja when the Doc is unfazed by Franz Rayner breaking a ladder over his head and is able to knock Mongo into the sky easily.
Subverted with King Radical when his plan to merge his world with the Doc's world at the cost of every normal citizen's life fails. At first Doc comments that he'll probably just be another villain hiding in the shadow until the moment to strike is ready, he came back worse than ever. With the pretense of making the city a better place gone he is openly lording his power over everyone and wants to see the Doctor suffer.