Dunban was pretty much the retired hero trope played straight. He saved everyone back in the day, but got injured, and now takes a back seat to Shulk while advising him. His most notable flaw would be his compulsion to save everyone despite being in no shape to do so, which was thrown back in his face when Shulk took over during the attack on Colony 9 because he was too weak, and then again when the person he wanted most to protect got killed. A lot of his wrestling with that failure happened off-screen between Colony 9 and when he joins the party later, but he still ends up feeling pretty purposeless, which we see during the scene with Riki on the beach after Sword Valley (which is when Riki cements himself as being the real father figure of the group despite Dunban seeming to fill that role up until then). Most of his development boils down to figuring out who he needs to be now that he's not the hero anymore, especially when Fiora turns out to be alive, but Shulk has already taken over Dunban's job of protecting her (to say nothing of the fact that she's now a nigh-invincible cyborg killing machine who doesn't need much protection).
He's not the most complex character, certainly, but he's also not implausibly perfect. Most of his role in the story consists of him not being good enough to be the hero anymore and just trying his best to be helpful despite that, which is very much not perfection. As far as minor JRPG characters go, I'd say that's enough depth.
But he wasn't, he was still trying to take on the role of "hero of all humans." His reputation prevented him from retiring despite his paralyzed arm, so they just made him able to fight and adventure only using one arm. If he really retired he wouldn't do any fighting.