I like Yamcha, and for me the reason why his character got relegated to the back was more to do with Toriyama steering the story away from martial arts adventure to power level based planet destroying fights. Up until the King Piccolo saga, the characters were humans, granted Goku was a Saiyan, but that wasn't known at that point, besides he wasn't that much greater than the others. When demonic kings were brought in, and Goku is starting to show more and more superhuman feats, it started to make Yamcha fall to the back, heck what happened to him, happened to Tien, and even eventually Krillin who was unable to do much other than run post Frieza saga.
When Goku became the strongest figher in the world, Toriyama had to look to beyond the heavens for more powerful foes that would not be bound by the limitations of being an Earth fighter, so they could still come off as a threat and having Goku find out he was a Saiyan just opened the door on just how powerful Goku could then become. Yamacha suffered like many characters did, Launch for instance was just forgotton, even Roshi was just left on his island home for most of the Z story, just watching aerobics on TV. You cannot really do much more with Yamcha when the story has moved onto more intergalatic alien orientated storylines, where him being a human just wasn't going to be enough.
He is still a very powerful fighter, remember he made Snake Way faster than what Goku did, trained in 10x gravity and did get stronger, but when the Saiyans arrived, it changed the game and Dragon Ball was never the same when Raditz stepped foot on Earth.