Explosive shot seems to have been over-nerfed, simply because it was (like many other talents introduced this expansion) trying to do too many cool things at once, and was summarily nerfed pretty badly.
I don't really see how it was balanced to have an arcane shot that ticked in an AOE that did 3x the damage of arcane shot per GCD used. It was high damage move that could be used completely on the move. The result? It obviously got nerfed.
I think that the main issue with explosive shot, from my perspective, is that it was trying to replace the wrong skill to give hunters that big damage boost. Hunters already have mobile damage. Since when do they need (massive) mobile AOE damage? And if they do (for pve), how is big mobile AOE damage balanced for PVP? It would be like giving mages instant cast targetable flame strikes and arcane explosions. The answer: It isn't, and wasn't. The result? Now you have a weak damage component, but keep the mobility factor as an instant shot.
Instead, I see myself wanting explosive shot to do nice, big damage, but at a cost: Mobility. Why isn't explosive shot a replacement for steady shot instead? Reinstate it's damage, but give it a cast time, not much different from having to cast shadowbolts and fireballs. If it had a cast time, the devs could afford to bump it's damage back up quite considerably, as well as sever the shared cooldown between it and arcane shot.
Chew on that in your mind and try to visualize how that would play out.