Illaoi is 100% balanced, I swear.

Well, you know, she actually is pretty balanced. She's easy to kite, you can kill her tentacles (lowering her damage) pretty easily, and a good portion of her damage comes from any tentacles she can get to slap you. If you get near her and her tentacles though? Well, it'll hurt. She's like Darius, Garen, Mord and all them -- keep them at a distance, they're nothing. But get within range...?

Just treat her tentacles like Heimer turrets -- focus them down, avoid them if you can't -- and you'll win pretty easily against her. She's also pretty weak to CC.