I think you really underestimate the power of the Volks. If you are getting over run by infantry you can use the 10 munition grenade volley (in a number of commanders), pick a commander with an MG34, or use a Kubel. Volks in cover do great. Kubel against shocks is great. Force him to smoke early and then use volks to pick away at him. You can quickly move the kubel to keep the shocks from advancing, and if the kubel dies you still get the fuel back.
To top that they can build green cover, have a ton of abilities, get good grenades, are a large squad, get excellent vet bonuses, and are cheap. The upgrade to shreks also makes them potent against infantry in cover since they can blow the cover away quickly. Seriously what more do you want with this unit, it is the Swiss Army knife of units?
I agree with you that OKW needs a counter to early vehicles, but right now volks are straight up stupid. For cost they cannot be beat. As they scale in vet they become extremely potent, this is why we see volks blobs so often.
Volks get beat out by every single baseline infantry unit in the game stat wise, of course at vet 0 which is the early game everyone starts in. And yes volks with commander upgrades are better, but still they can't stand up to Shocks/Rifle blobs alone.
The reason they scale so well dude is because they vet so fast due to 1. very lost cost unit, and 2. They have a very high damage weapon in the shrek. Take the shrek away and they are not nearly as good due to not being able to get vet.
What do Schrecks have with Volks/Rifle or Volks/Con matchups or balance? Will removing Schrecks somehow impair Volks ability to fight them? Do Volks need obers to fight Shocks? I don't get it.
OKW early game against infantry is not a problem (Riflespam can be a bit overwhelming, but Ostheer has the same problem, so we know it's nothing Volks related). Schreck changes do not apply there.
What shreks have to do is that it gives volks a reason to be built as opposed to say, more sturms or getting a second kubel. It also makes them useful late game as well. The problem is if you take away the thing that makes it good over the arch of the game, you need to give it something worth while to make people want to build it! And OKW has the same troubles Ostheer has early game, and especially on urban maps as OKW has no mortar/good indirect fire.
By far the second best t0 inf in the game after Rifleman. They are awsome with awsome abilities.
If you use a grenade you critically put back your first shrek, and Volks lose out to cons at medium close range every time. Yes they become more useful later on, so why take away what makes them better later on.