Yes, but not for the reason that you think it is.
End game sledgehammers are still good against end game enemies (1 or 2 boinks = kill), the problem is the damage potential for sledgehammers have a rather low ceiling, due to the lack of feats and other non-equipment stuff supporting it.
Knives, gloves, and SMGs get AP reduction from dexterity, so as their damage per turn increases with equipment quality, the attacks they can make per turn is also increasing with their level, especially when their level grants ap reducing feats such as Lightning Punches or Spec Ops.
Assault Rifles get the Commando feat, essentially doubling their damage output per turn. LMGs and Miniguns benefit from Concentrated Fire feat, the Heavy Metal feat makes their damage scale with armor. Full Auto and Mag Dump allows assault rifles, lmgs and miniguns to do more attacks per turn.
Psi users have AOE abilities which make the damage scale with the number of enemies hit. Or crit on demand. Or AOE crit on demand, wow.
Grenade launchers' damage also scale with the number of enemies hit.
Compared to all the other weapon types above, sledgehammers don't have anything else to increase the number of attacks per turn. Even when equipping a tichrome hammer, lifting belt and tabi boots, the best you can do is 16ap attacks, which is 3 attacks per turn without adrenaline shot and PTC. Strength does not decrease the AP cost of sledgehammers.
The 2 sledegehammer feats don't add much to its damage potential either. Super Slam adds a not-significant amount, but its not game changing; Pummel costs 0 AP when specced, but does only half of your normal swing damage. But more importantly, both feats are on a 3 turn cooldown. I have made many sledgehammer builds which did not involve any sledgehammer feats, and it turned out just fine.
The problem comes in late game when the game starts to throw more and more enemies per encounter. Sledgehammer builds have a tougher time handling these bigger crowds, because no matter how big the crowds are, sledgehammers still only do 3 attacks per turn. I counter this by always having 10 CON in my builds, and typically Dodge and Evasion too, and also armor in some builds. These extra survivability allows for more turns of "3 attacks per turn", and win encounters through tenacity rather than pure firepower. Disclaimer: this strategy might not work on Dominating, I've always played on typically Hard, sometimes Normal difficulty.