To describe Seth's role in Super, I'll use an analogy: Seth is to Dhalsim as Akuma is to Ryu. Allow me to explain. Akuma is basically Ryu with a few more moves (air fireball, teleport), greater damage potential, and lower health. The same applies to Seth as compared to Dhalsim. Both Seth and Dhalsim are able to zone out the opponent with extending limbs and fireballs. When the opponent closes in, they can teleport to safety. Seth, like Akuma, has additional offensive tools, like his Spinning Piledriver, D+MK headstomps, and a Shoryuken. Whereas playing Akuma is all about his relentless offense, Seth is still able to be played extremely defensively, like a Dhalsim with more options. His feeble health, however, makes it all the more dangerous when an opponent breaks that defense. Arcade Edition apparently attempts to change this.
Without his extending limbs, Seth will go from being an alternate version of Dhalsim to a new and separate character. The j.FP change takes away a huge part of his zoning game, as does the change to his Ultra I. Instead of being able to poke away from full screen, then unleash Ultra on any slight mistake, Seth will need to find way to get close to his opponents. He'll be more focused on offense than he is on defense. I welcome this change. If Capcom gives Seth more health, then that should make up for losing his defensive tools. Currently, Seth's 700 points of health force players to err on the side of caution, taking no chances and running away incessantly. With health levels akin to the other characters', Seth will be able to take more risks moving in and rushing down opponents. In fact, he will be forced to, unable to rely on full-screen turtling and runaway tactics. I believe that this is a case where apparent nerfs could actually lead to a more powerful character.