Does anyone else find the starter deck insanely useless?

I find it quite good really.

It's not totally useless but it has it's faults. I found that without it being modified a bit I had to rely on my opponent becoming very unlucky and me getting the rights cards at the right time (Defensive monsters, Swords of RL, or Justi-Break). Just play a bit more and you'll do better.

After a few minor adjustments... (adding and subtracting a few cards) I was able to beat Yusei with it and run the table... so anything is possible....

Shoot.. i basically schooled Yusei on my first go with the Intial deck

Okay look, the beginning deck you get is practically the best thing you could get the issue is you really, and i mean no offense with that, the starting deck is mainly new cards and you may know what your doing to a point but these are new cards and you don't know how to use them correctly yet, give it time and practice and it will be the best thing you could ever have.

I actually beat my friend who uses the three god cards and had exodia in his deck, i slaughtered him in 7 turns.

You are right, its not the best deck, especially because your opponents have structure and meta decks. (One guy even has a lightsworn deck o.O) However as some people aptly noted, if you play for a little, you will start to acquire more cards that will help you out. If you are stuck, just keep replaying and replaying the beginning till you get the cards you need.
As for KaneHikari, any deck that contains both the god cards and exodia pieces either sucks or would have to get irrationally lucky every game, being that they are two completely different strategies. I played yugioh in tourneys for almost 2 years, and while i did take a short break, im back now and ive got a good idea of all of the new cards.