Yes, the Possession tradition is over powered-- but really the reason is more that spirits are overpowered. The possession itself does add an edge, and the lack of GM's and Player's understanding increase that. Possession traditions also seem to have gotten prime choices of spirits. Two things that are overlooked:
1. Noticing someone prossessed is really, really easy. This was overlooked in the GenCon 2009 SRM Scramble and left a bad taste in a lot of peoples mouth. Spotting the spirit is (6 - Force) target on a perception test (SM pg. 95).
2. Possession is (F * 2) vs. a living target's (Will + Int). Since most spirit's powers just go against Willpower, the Intuition part gets left out a lot.
3. It's a simple action to command a spirit, and a complex action to cast-- so if the mage commands his spirit, no casty for that action. This is overlooked a lot on other traditions too. The spirit needs a complex action to possess someone.
Lastly, for reference: most spirits have Fear... which is more OP'd than possession. Fear is spirits Force time two, vs. Willpower. There's very little you can get to improve this, as Spell Defense doesn't help. If you can get a Force 4 great form spirit, where they get fear as an AoE, you can pretty much own all the NPC's in the area.
In addition all spirits get their skill ratings equal to their force, so the Shaman that summons his daily force 9 spirit (common at our table), will own the 150 karma, melee specialized, weapon foci fighting adept. Let's be honest, the spirit will fear the adept anyway But he would get the same amount of dice as this adept to attack in melee.