I'm gonna go on an post my thoughts as well. I've read the changes when they were first posted and I had a good night of sleep since so I thought a bit about it.
I understand Matricks' point about different levels in the game. I trust he can recognize a good argument from a bad one without having played with someone, if not I invite him to play with me.
First point: about the ESL finals & 1on1 on dm1 (I was a contestant). These are very particular TW fights with no end-game other than winning. As seen the strategy is to try to control the map by staying on the right side (high enough) to always have the bonus supply, but also to gather weapons to prevent your opponents from having them, and finally to kill them when they spawn.
But when both opponents have weapons and are fighting, they send grenades at each other and there, the first one to be hit is the less lucky or someone who exposes himself too much. When someone gets an advantage he considers good enough, he will try to ensure his kill by going melee fighting (or the one with fewer hps might like to reverse the situation and go make-or-break).
It is extremely hard to kill any competent player who has no ulterior motive (like getting the flag back) with only grenades and pistol. It's not a matter of aiming, it's just that they are easy to avoid if you don't mind taking a different route instead of charging! In dm1 there is no ulterior motive so I'm afraid Matricks is basing his balancing over this. Shotgun is only useful at short range and the only way to limit self damage is to use the hook to shoot in your opponent's back.
BUT! The hook is a double-edged sword! When you hook someone you are likely to be badly hurt: the hook is currently a reward for INITIATIVE on melee. There are different counters to hooking, one being the reciprocal hooking which somehow nullifies the traction bonus one tee has over the other.
On TW with an end-game (e.g CTF), hooking 2seconds is really a necessity. Some players could get away forever with the flag if it was shortened to 1second. With hooking 1sec, the flag will be much easier to take (lower defense level), and flag carriers much harder to kill. Considering how hard some flag carriers are to kill already, I'm not sure this is a good idea.
Lappi said in one post that it was to keep the game simple. Simple does not mean easy. Those are orthogonal concepts. The game is simple already, but it's far from easy, and it shouldn't be (or it would be boring). The current hook+shotgun isn't easy. The concept is simple but its realization is hard. I remember achieving a kill that way with 1 hp, you have to manage not to get it a single time by the enemy shotgun, that's very difficult against even a mid-level player. Seriously, for having introduced quite a lot of friends to the game, they suck so much when they start that they don't care the least bit about being hooked. Any game involving so-called "pros" and "noobs" will suck for both of them anyway.
With the hook reduced to 1sec, some current legitimates techniques won't work anymore. For instance, blocking a tee against a platform and shooting grenades against the wall or curving to fall on the tee (those take about 1.5s to go up and fall down). Those are beautiful killing moves that would disappear from the game.
You got it: I think the hook is good right now. It is the most powerful weapon in the game but it has to be used together with another and it's hard to master; if you're fast enough you can avoid being hooked, and if you can't you can survive. If you don't, well that's hard but, I guess the hook is hardest on flag carriers. It's them who suffer from it the most (to delay them and have teammates come gang them up) and that's a good thing for ctf balance. As for tweaking the force you inflict on a particular opponent, it shouldn't be by too much.
By the way most noobs don't react when being hooked and that's why they die so fast from it.
Onto the hammer. As tacone said, it's almost impossible for a skilled player with a hammer to kill another skilled played with a weapon. It is possible in confined space, true. And I manage it often because other players tend to panic (I get killed by hammer too sometimes). BUT putting a reload would be a huge mistake; I play ClanWars ctf 6vs6 and most weapons are gone because of ctf2-wide weapons lockdown; you have to play pistol + hammer and pistol gets out of ammo very quickly. The hammer is hard enough to use perfectly so that it doesn't need to change. The kills ICE-TEA made with the hammer in ESL were because of initiative, skill, and lack of reaction from his opponents rather than the hammer being overpowered.
Shotgun is fine imho, and grenades exploding more, well why not but why? Most of the time grenades are avoided in the air so there is no detonation even if you avoid them by 1mm (that's a good thing). Having a bigger explosion prevents "finesse" ground grenade evasive maneuver (which are quite funny, when you walk to avoid a grenade ).
As tacone said (again), matricks should come on fp8 - Ckz ClanServer to watch high-level CTF2 games and he will see that once there is an endgame the game transforms and some features are needed, including the ability to kill with the hammer very fast, and this is fair and balanced imho.
I really don't like tuned servers but if you change it, please make them options to tune (like hammer_reload_time and hook_grab_time).
Thanks for hearing me.