Media aimed at children (ie Digimon, Pokemon, etc) is full of Mary Sues. I'm okay with that, because I don't think that five year-old me would've been able to understand the deeper nuances of human nature, and I don't think that especially young children really should have to. In a sense, you kind of want the shows/books aimed at young children to have "flawless" characters, because then the kids watching/reading can aspire to be good/brave/friendly/kind. When the kids are older, sure, they can understand that everyone is secretly an asshole and part of growing up is learning that everyone has flaws, but that's for later.
I think that the propagation of the flawless character (if the term Mary Sue is really so awful) archetype that you see, primarily in fanfiction, is a flaw of new writers who are simply trying to imitate the media they absorbed as children. Yeah, Ash Ketchum's pretty flawless and boring; the fanfiction from new writers that derive from him encapsulates the same sort of thing. Pretty sure my first experiments with writing involved a massive sue, too, because it's goddamned fun to go around writing an extension of yourself that actually wins in life
wow that last bit sounded a lot more depressing than I intended
I don't know if there's an actual definition for "Mary Sue" (somehow, I doubt there is), which makes this difficult. Some people will draw the line at "character who has everything;" I prefer to draw the line at "plot bends to make life easier (or in some cases harder, with no real impact on the plot; see Angst Sue) for the character." People with the first definition, yeah, can sling that all over anything they want. The second definition is a lot harder to stick to anything outside of fanfiction. However, given that there isn't (to my knowledge) any legitimately pinned-down definition of "Mary Sue," I guess it's silly to even call it an overused term in the first place because no one knows for sure what it even means.