Here is a comment from another thread that talks about this...
Shes not overpowered so much as she is very good against and with popular META choices at the moment.
You can take that link for more discussions, and I will copy+paste my comment here that explains the issue on why shes banned so much.
Lulu counters stuff thats popular at the moment, all while working well with stuff that is popular at the moment.
She works well in supporting and stopping:
(and others)
Those are nothing compared to some of her stronger synergy champs she can support:
(and others)
Notice those are divers, she can hit them with her E for a shield and extra damage, W for move speed and atk speed for engage, then R to knock targets up and give them more health to rampage with as well as a melee range AoE slow. She is a diver force multiplier.
Also... divers are pretty strong at the moment, so a support that makes them stronger (also much safer) will of course seem really good.
Why ban Lulu? Well you cant ban all the champs she makes stronger, so ban the one that makes all of them stronger. This is also a smart ban if youre playing an assassin or diver... or marksman she can shutdown. It really sucks to have your Jhin ult canceled by being polymorphoed.
Speaking of shutting champs down:
(and others)
Those guys get their shit stopped cold and can often die in counter reprisal from Lulus W, R lockdown, then shielding the assassin target with E, and slowing with Q.
But...
Consider that Janna, Taric, and Sona (especially Sona) all have higher win rates, and can do a lot of the same stuff... I think its mostly a combination of the sheeple effect and the META. "I hear Lulu is OP, I see her banned a lot, I better ban her... baaa." Even when she woudlnt be a cold shutdown to their champ, or the enemy composition isnt diver based, they ban based on fear and habit instead of reason and strategy. Of course some people are banning because Lulu could stop their assassination attempts or want to avoid empowered divers.