Why Tempest isn't viable
Tempest is definitely viable, but as of now its not an optimal choice. I spent a lot of time with it in the beta and I think I can discuss it’s viability.
I do agree with your reasoning that arcane is likely the biggest reason why tempest isn’t optimal, but I don’t agree that strictly nerfing it is any solution at all to the problem for several reasons.
1. As it stands I believe that underperforming traits like imbued melodies and latent stamina were intended to substitute some of the utility of arcane (vigor, boon duration) but fail in practice. In particular imbued melodies’s boon duration is locked to a GM trait that necessitates the use of a weapon that generally underperforms except for one boon-sharing rotation. The restriction limits it severely.
2. Tempest minor traits are noncompetitive with arcane minor traits as they focus on making overloads easier to pull off, making them overly niche.
3. Nerfing arcane would require buffing in other areas, specifically in regards to condition removal. As it stands tempest can replicate the healing of evasive arcana with elemental bastion to a reasonable degree, but it can’t replicate the condition removal of evasice arcana itself or the cleansing water synergy supplied by elemental attunement in any capacity whatsoever. Your options for condition removal as a tempest are water overload, which is impractical to use purely for cleanse since you need cleanse on demand, not 5 seconds later, and its the riskiest overload to use compared to the others. Your other options are trait water+cantrips, particulary cleansing fire/ether renewal, or take shout runes to clear condis, which still makes you susceptible to condi-bursts even if you can support allies better, and diamond skin, which is difficult to maintain without traited cantrips.
This all being said, there are some tempest builds that really do work. The most notable one that drastically improves itself over its arcane-base ele counterpart is marauder S/F fresh air with air/earth/tempest, simply because air overload supplies the best damage and the best defense through shocking aura, and gives S/F ele a reliable source of AoE damage that is greatly enhanced by fresh air, while keeping things like one with air to be relatively mobile.
Besides that, various auramancy builds do work with celestial stats, but are held back by the overly spread distribution of aura traits, powerful auras+shout auras are unsynergistic with eachother, and the condition weakness that dropping arcane causes pigenonholes you into traiting cantrips, earth CDR for focus, and/or shoutrunes just to manage it at all, which makes achieving a jack of all trades role as a tempest harder to do than base elementalist.
You can also run a more standard arcane/water/tempest build with cantrips that plays like a normal D/X ele that only uses overloads rarely to either buff warhorn protection sharing with earth overload+heat sync, or as a stunbreak that lets them counterpressure the enemy. In this case they can either choose earthen proxy for more tankiness that simulates stone heart to an extent (this trait will be buffed though) or harmonious conduits to overload more reliably and gain a 10% damage modifier to partially make up for the one you lose by not going fire. In this case you can support/damage in teamfights a bit better than a normal elementalist, while your 1v1 potential will be a bit lower due to less damage from fire, forcing you to have to hold the point in a 1v1 rather than assault it against an enemy bruiser like D/D fire ele can do.
tl;dr- there are definitely viable things you can do in PvP with tempest, but unless the strengths of arcane-water synergy are more appropriately distributed between base class lines and tempest traits/skills, tempest will struggle to be an optimal pick over fire D/D ele in the coming meta.
Taking a break from GW2 to play various
Nintendo games..
Tempest – Water – Arcana – bunker to the extreme
Not 5 seconds later, Nearlight, 6 seconds later.