I relied on them as my only RELIABLE close/mid range infantry. Never built more than one extra squad aside from the starting squad.
That's the overall problem though, the Axis as a whole don't have any strong or reliable mid/close range squads to deal with the Allies in mid/close range combat. Fallschirmjaeger are far too frail outside of cover to do that job. Panzergrenadiers are... well have been pathetic for quite some time. Sturmpioneers were doing that job well in spades up until this recent nerf to them.
Jaeger Light Infantry were okay but without grenades never truly shined...
So tell me what exactly should Axis use for mid/close quarters?
Axis have always been a long range faction. For OKW, panzerfusilier work fairly well at range, and blobbing them works well. Volksgrenadier blobbing also works rather well since there are so many that they are rather durable, and with grenade assault (from commander), it would be bad for enemy to get to close range to deal with them (10 muni, but short range - timing it right can have amazing results and a dead enemy squad). Panzerschrecks keep light tanks and lone mediums off them, and if they all have panzerschrecks, a proper counter for them usually arrive by the time you get a panther. People complain about fallshirmjagers being OP, but they are too frail for me as well. Stuka zu fuss (but costs fuel) is pretty effective at keeping large amounts of clumped enemy infantry off of you.
In this game, long range has always been superior to short range. What i mean is, a long ranged squad can wear down a close combat squad to a point that when the CC squad is at the proper range to attack, it has already lost too many men to kill whatever it was going to attack and has to retreat. There are some maps that make short range units perform better, but cover is your friend. Timed grenades are useful as well. Its more advantageous to stand there and fire from afar than needing to run in close to be able to deal damage. Shocks have armor and smoke grenades to negate this, but it would be hard for them to be useful if they did not.
The main thing is long range and green cover work very well for OKW. Good micro on, well, blobs of volksgrenadiers and panzerfusiliers counter Allies somewhat well. Blobs usually can kill the gunner of mg's, rendering it useless as tons of rifles from squads gun the squad down as the next gunner gets into position. I usually have never built more than two sturmpioneers because they are expensive to produce and reinforce. They still perform well as flanking infantry (STG's still deal a ton of damage).
Now here is what i cannot explain. Ostheer is very screwed against USF. I cannot tell you how to deal with rifle spam as Ostheer. As OKW, i answer one spam with my own spam. Snipers arent that effective vs. blobs, and volks and panzerfusilier are cheap to reinforce. An obersoldaten squad or two is good for assisting with DPS. But when you spam panzerfusiliers, you have to remember not to fall back on AT.
And AE super DPS buff; i dont even know. It surely needs to be less, or the squad needs to cost substantially more.
JLI are pretty good spammed. Their G43 kills a model if the model has less than 75% health, i believe. A squad that tries to close in on some JLI would lose a lot of models on the way, and throwing a grenade assault in their path would kill them/keep them away. But you will have to find a way to keep up wuth AT or a suprise t34 or m15 will ruin your day. Yes, JLJ are no longer close range killers...
Anyways, dont hate on me for what i cannot explain and what i have observed. This is my honest insight, and the game is far from perfect. I will not defend Allied cheese units, but Axis (mostly OKW) have some good units and tricks up their sleeve as well. There will always be difficulty dealing with Allies, but Allies also have their own difficulties dealing with Axis.
I usually play several custom 2v2's a day, 3 days a week with my friend as strictly OKW. Sometimes we win by a landslide, sometimes winning a close match, and sometimes losing to ISU's.
The raketenwerfer and weapons with similar projectiles hit the ground too often, but that is a real, separate discussion for improving the weapon projectile.