I'm not sure if it needs nerfing or not, I'd just like to see them become more consistent. Same goes for bombs and smoke bombs.
Sometimes it won't kill me with armor on, sometimes it will, other times it'll just down me. Sometimes I die when I'm no where near the radius of a the fire, sometimes I don't when I get directly hit, and sometimes I'll die from a molotov that landed on the other side of cover.
I have no problems with bombs and molotovs being powerful, they should be, I'd just like to see some consistency.
Molotovs, in their current form, need some adjustment. For starters, there are simply too many in this game. The MP practically throws health kits at you, you rarely ever have to craft them yourselves. So all those bottles of alcohol and rags you accumulate almost always go into the production of molotovs. While the game forces you to make trade offs with all the other crafting ingredients, there is no sense in making health kits over molotovs as things stand.
If you start doing bad, the game goes a little crazy on the welfare system. Boxes will give you tons of stuff (way more then the winning team is getting) and even throw out pre-made molotovs. This is an issue and needs to be worked on.
Molotovs in conjunction with the Explosive Expert perks turns these already dangerous weapons into little incendiary bombs. With EE2 equipped, you can be more then a few feet off target and still manage to kill people in droves. This is an issue that needs addressing.
In conclusion, molotovs aren't "fine".