The point is they aren't supposed to look badass. That's why they had shitty costumes in the book. They're normal people, and normal people aren't badass. NOII is supposed to look like a fat nerd, not a badass. Most of the other costumes worked fairly well, but like I said, they're supposed to look kind of goofy.
The thing with NO II though is that he was a nice average Joe, he still knew how to kick ass and take names, flabby gut and all. If Moore wanted to present him and SS II as totally goofy and out of shape, they would have lost the fight to the Knot-Tops in the alley. Their victory was proof that there was still a little Crimbuster left in them.
Also, you can still tell Patrick Wilson gained weight as the '85 NO, but when they shot the original Crimebusters (or Watchmen) meeting, he was in good shape. It's subtle, but it's there.
Also, the "normal people" argument could possibly work against the movie's NO II and SS II, but not Ozymandias. He was the world's smartest man with the strength of a god, even after retirement, and I think his costume is extremely reflective of that.