Difficult question... I loathe sniper. Hate playing as him or against him. But he's kind of a necessary evil. If you don't have a class that can pick targets from long range, classes like heavy, engie and to some extent demoman become a bit too difficult to deal with when pushing into them.
My main issue with sniper is that it was intended to be balanced by skill, but either people became too skilled or its mechanics wasn't made hard enough to achieve this. Hitscan in general is kind of OP because it removes control from the person being shot at completely. You click, and if you clicked on the right place it will register bar dumb hitbox failures - it's server-side and instant from the perspective of the person being shot at. You can't dodge hitscan the same way you can dodge projectiles. Good movement will make it harder for the sniper, sure, but ultimately regardless of how you move, it's all down to whether he clicked on you or not. And with skill the way it is now, it comes to the point where it's not worth it to cross a sightline and hope that your movement is good enough to make the sniper miss. He'll get you enough times to dissuade you from this.
Basically TF2 is a slow game for what it is - a FPS with a lot of mechanics and weapons inspired in Quake and other arena shooters. If you've ever played Quake or UT you know what I mean. People aren't as scared of snipers there because everything moves so fast that the levels of skill required to shut down a sightline as effectively as a TF2 sniper can are just insane. And in TF2 I can understand that relatively immobile classes like heavies, pyros and soldiers/demos when not jumping should be easy picks, but the fact that more often than not prem snipers can headshot scouts jumping and dodging their way across a control point is... I shouldn't be scared of a sniper as scout unless I only move in straight lines.
Problem is I can't think of a solution for this issue, the way I pose it. Other classes have hitscan, of course. But shotguns, pistols and revolvers (the amby has its own story as basically a mini-sniper rifle but never mind that) are balanced by damage fall-off so that the classes wearing them risk taking a lot of damage themselves to get kills. The sniper, of course, doesn't have to deal with this. Hitscan + no falloff = potential for OPness, where only the skill of the sniper matters, not the skill of the people getting shot at.
The only thing I can think of is adding bullet travel to snipers in the way more "realistic" shooters like battlefield, sniper elite etc do, raising the skill ceiling a bit further and hopefully making other classes' lives easier. But I doubt this is possible in TF2. Playing sniper with high pings would become unbearable and there would be a lot more prefiring and lucky shots. So I don't know, really.