I like lots of those characters, but a look at who Ryu Hayabusa has beaten over the years suggests he's a grown man and the rest of this field are premature infants.
You can throw out everyone except Bison and Liu Kang and possibly Kasumi and Yoshimitsu since they don't do magic. Kasumi's and Yoshi's magic is limited to teleporting behind people to smack them, and that's about it.
Liu turns into a dragon and shoots fireballs, Bison can do the electric torpedo and fly.
Ryu can shoot about 10 different kinds of magic, including one that makes it almost impossible to hit him (firewheels), and he has slaughtered huge demons and gigantic monsters like it's his job. Come to think of it, it IS his job :-P
Look at Liu Kang's little 10 foot tall dragon, and then watch Ryu in these clips against 100 foot tall dragons, and tell me if LK (the biggest threat in the batch, IMO) has a chance, even in dragon form:
Now, if all you're doing is going by Hayabusa's fighting game abilities, it gets a LOT more interesting :-P From what little I know of various fighting games, the "tier" for given characters changes game to game (for example, Kasumi was top tier for most DOA games, but not in #4 or #5 or s/t like that), but he's been at or near the top tier DOA for most of the series.