Karma is amazing at pulling out clutch saves, her sustain is amazing, and there is no time at which she's not contributing something to the team. The issue is that her mana hunger and sheer damage focus make her into a more effective mid/top than a true support, which takes her out of the current metagame. It's not her lack of ability that makes her rarely used (and thus seen as "underpowered") but the fact that she has no real position on a team. Lux has the same problem - there are more viable mids, and she's a combat support, not zero-CS.
But no, she's great.
The popular champions are ones that fit into any comp. Karma needs a particular team to function well and people aren't willing to spend the time to develop a new strat that utilizes her because building a specific team comp is easily countered via bans.