Why are many people complaining that Retribution is overpowered? The answer is a little bit complicated, so I'm going to go bit by bit:
1. Ret paladins deal burst damage by design.
As I mentioned in this post, written a year and half ago in March 2007, Blizzard likes giving paladins a few strong abilities with long cooldowns. This means that you can line up all your cooldowns and deal a ton of damage in a short timespan. The downside is that you are then basically auto-attacking until your cooldowns come back up.
Second, burst damage is how Ret paladins are designed to kill people. Other than straight damage abilities, a Ret paladin only has 2 stuns with 60s cooldowns. Other than those two stuns, a paladin has no way to really control or put pressure on the other player. Paladins have no snares, no spell interrupts, no gap closing abilities like charge, no anti-healing debuffs like Mortal Strike, and most of all, no real ranged abilities. Hammer of Justice is the solution to all those problems. (When all you have is a hammer, everything looks like a nail.) A Ret paladin basically runs up to the other player, tries to stun, and hopes the sheer amount of damage kills them.
The paladin sees the 90% of the time they are without these long-cooldown skills, and considers them underpowered. The person who was on the receiving end the other 10% of the time is unhappy, and considers paladins overpowered.
2. Retribution is relatively simple to play.
You run up to someone, hit all your buttons, and hope they fall over dead. All the other classes are more complicated, and require a bit more time to get accustomed to. I don't think people have really gotten used to the new tools they have available. So it's no surprise that Retribution appeared the most powerful right out of the gate. All the other classes have a steeper learning curve.
3. Seal of Command is very swingy.
Seal of Command (or Seal of Casino, as paladins like to call it) is a powerful but random ability. It has about a 50% chance to proc if you are using a 3.6 spd weapon and the SoC glyph (1s internal cooldown). It does about 56% holy weapon damage, which we'll handwave and say is roughly equal to a weapon swing.
So let's say a Ret paladin runs up to someone and hits Judgement, Crusader Strike, and Divine Storm. She'll get off about 2 weapon swings as well. So that's a total of 5 swings in 4.5s. But SoC has a chance to proc off every ability. Taking the internal cooldown into account, there's a 30% chance SoC will proc 3 times (which is the maximum), giving 8 attacks in 4.5s, all of which can crit. That's very bursty.
4. Retribution damage talents are all front-loaded.
Pretty much all the damage talents for a Retribution spec are in the Ret tree, this means that they can all be taken at 70. The talent points from 70-80 will be spent on utility talents. A Ret talent plan for WotLK might look something like:
71: Finish Pursuit of Justice
72-73: Improved Ret Aura
74-75: Sanctified Wrath
76-80: Blessing of Kings
None of those are talents which directly increase active damage. They're all essentially utility talents. This is different from the other classes. Most other classes will get an increase in damage from the next 10 talent points, probably on the order of an extra 10%.
So a Ret paladin at 70 will have a greater proportion of damage talents than other classes, but they won't gain damage from the next 10 levels. So Ret is slightly ahead at 70, in order to ensure that everyone is level at 80.
So that's how I view Retribution at the moment. Retribution uses a few powerful abilities with longer cooldowns, and thus deals burst damage by design, apparently to compensate for its lack of control. All the other classes have a steeper learning curve. Seal of Command is very swingy. And Ret is able to max out the damage gained from talents much earlier than the other classes.
Is that overpowered? Maybe the talent issue at 70, but it will sort itself out by 80. I certainly don't think Ret is or was overpowered enough to warrant a hotfixed nerf. But I could be wrong. We need burst damage to function properly, but how much burst damage is too much? Half the challenge of playing a Ret paladin is actually getting to melee range. It's not like Retribution can Charge or Stealth or Death Grip. If a player lets a Ret paladin get in range, she has already lost half the battle.
Though you should take my opinion with a grain of salt. I'm not really a PvP player. I just want my class to: 1) feel like a paladin, not a warrior or priest; and 2) be viable in PvE raiding.
Edit: I do agree with people saying that Divine Shield (bubble) should be changed to -50% damage while it's up. It's currently -50% attack speed. Back in the old days, this was functionally equivalent to -50% damage because all we had was auto-attack + Seal. But now with our instant attacks, the attack speed reduction is a much lower penalty. Divine Shield is a defensive ability, and you shouldn't be able to use it to push through a burst kill without repercussion.