Not quite, heavy and pyro each have severe weaknesses, such as awful mobility and lack of effective range. The demoman however, can output roughly the same damage as heavies (depending on how well the splash hits people) and he has decent range (sticky snipes and amazing mid range), traps, decent movement speed, sticky jumps, effectively 2 primaries (GL and SBL), and high burst damage making it difficult to avoid being killed by stickies or grenades. Also, splash damage hits everyone hard.
Don't get me wrong, it is easy to mass as pyro and heavy, but far easier as demoman.
THAT SAID, I would +1 full demoman unlocking on blue as they take the same risk as soldiers in terms of freekill. Just restrict things like traps on vital map areas (eg trapping the entrance to medic). So while demoman may not have the surgical precision of a sniper rifle, he can help greatly with mass rebellion and reduce the effectiveness of medic crusades (Lord knows those are fun for blue). Besides, JB usually has at least one staff member online if it is populated, and we have a call admin if people mass freekill without staff online.
If we are only unbanning melee unlocks and shields on demoman, then I will -1 it because the same thing from actual gameplay servers applies here, the demoknight is dead weight on their team since other classes do their job better. However, this outclassing is actually worse here because of the high (random) crit rate of melees in general and the fact that red is forced into using melee shouldn't be that far of a jump to the demoknight in question being horrifically murdered. Additionally the demoknight has to get into melee range (baiting) to actually hit stuff...
Just my 2 cents on the matter.