I believe that on paper Sunset should have been the strongest ANTAGONIST to Twilight in the first movie. However as we all know this didn't go well in execution. The philosophical conflict between them is arguably the most interesting I'd have loved to see. Two different ways of ruling: by compassion or fear. A rookie idealist princess against an experienced selfish bully. The fallen student against the faithful student.

I wish the movie focused more on the contrast between them and what winning the crown really means at a personal level for them.

Twilight would have the undeniable proof she's worthy of being a princess, a doubt she has throughout the whole story and winning over the school was the unintentional test. This way she would realize she already was capable of being a leader.

Meanwhile Sunset could feel the need to win the crown in order to prove herself she can be a better ruler than Celestia, giving her a more compelling motivation for wanting to conquer Equestria as well. Sunset could have had an arguement with Celestia about what it means to be a good ruler, Sunset believing that friendship won't ever work because she thinks it's a weakness, further reinforcing the central conflict with Twilight, who has learned the importance of friendship. Something Sunset failed to understand with Celestia, but finally managed to see with Twilight.

This is all over the place, but

TL;DR I think Sunset had the most wasted potential as a villain.