Full Disclosure: I've been one tricking Xerath in Ranked for over a year at this point. I'm going to have my own biases, and some of that may come out here.
He's a solid pick, particularly in lower ranks. If he gets rolling, he can really get rolling, and you're right that his damage can reach insane levels. Because of his wave clear, low rank teams have a much harder time closing out against him, and he can buy enough time for his team to get back in the game. His ult range allows him to participate in team fights that are half way across the map (another massive advantage in lower ranks where your positioning isn't great and your team won't wait before starting a fight).
That said, I don't know if he needs nerfs or not.
His stun is next to useless point blank (0.25 seconds), so anyone who can get on top of him (hello Zac!) is likely going to be able to stay on top of him unless he can get some help. Even something like an Alistar can keep Xerath completely out of the fight by threatening to cancel Xerath's Q's and Ult, which should turn the 4v4 in Alistar's team's favor.
I'm happy to answer more questions if you have them, but in general I think he's in an OK spot.