First of all I urge the OP to play a harder skill level. All your posts indicate that you feel you have to compete with demo men for kills. The game isn't meant to be that laid back, its meant to be so frantic that you are glad to have a team mate's firepower to back you up. Play a harder skill level you are obviously ready for it.
Also if you feel demo man and firebug kind of make each other redundant (might be right too), then just keep away from him, there's always more than one entry to hold off. If a team has 2 or more demo men and/or 2 or more firebugs then it is not a well balanced team and will fail anyway (someone gotta change class in this case).
Other points I'd like to make:
-Firebugs get less kills but don't need all that much money. As you perk up the flame thrower becomes very cheap and since you don't have an expensive super weapon to look forward to, you don't need a lot of money. Firebug is a support role not for soloing and a good one is still very valuable to a team I believe. In other words, you don't get a lot of kills but your job is to weaken them. Although I agree that its wrong for team mates to shoot up something like a burning crawler/stalker/clot.
-I'm very sick of hearing people say "husk immunity is useless because firebug can't hurt Husk either". Its funny people would say that because last I looked dualies, SCAR, katana which can be carried in addition to flamethrower, all rip up Husk quite nicely - while still being immune to the bastard.
-The incininary grenades are better than standard nades. Not in the least because you can nade your own feet when surrounded, often a good alternative to reloading.
-Someone said the confusion/on fire effect on zeds just makes it 'harder for other classes to shoot them'. I presume you mean the crossbow since its the only weapon requiring precision, in which case I suggest that the crossbow is the problem (relying on cheap weapon to insta gib all scrakes and fps), and I bet the next patch will fix the Xbow.
Finally I think people are thinking too much along the lines of "other classes are buffed, why isn't firebug buffed???". The changes to other classes, namely the new weapons, is meant to be balanced. If its not, then you can be sure Tripwire is working on it. Be grateful for 7 extra weapons, what the hell else do you want to give firebug anyway? Incinenary bullets someone said...wtf how are bullpups and pistols supposed to shoot fireballs???