Grell wanted to do a more serious street-level book. But he was also - unlike most of the writers who have handled Green Arrow recently - a bit more realistic on just how easily many of Ollie's conflicts could be solved in a world where Ollie's best friend is a space-cop with a power ring and his girlfriend is a martial artist with superpowers.
Hence the decision to depower Dinah in Longbow Hunters - her injuries while being tortured are what led to her being unable to use the Canary Cry until about halfway through The Dixon run on Birds of Prey.
You can read Grell's side of things - and his regrets about how Dinah came off looking much worse than he ever intended - on his website. You can even e-mail him and ask yourself, if you like.