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I think opening Zillo up to all factions doesn't solve the problem. Then everyone would just take it instead of every imperial player.
You could add a core rule that "once per attack you can discard a card to add one block". That might be interesting I guess.
I also agree that it hurts Pierce 2 units more than it should.
At the end of the day, it's a card that was designed to help make things like Vader/AT-ST more competitive... I don't think it achieved that. Imperial trooper lists were doing fine without Zillo. Now they are even better. I play Imp Troopers btw so I'm not bitter, I just don't like what it's doing to the game. It's not a huge problem but I think it should be addressed.
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I feel like Zillo would make more sense if it were only usable for unique figures, or figures above a certain cost. Like you said it seemed to be designed to help Imperial heroes, but instead it's helping Imperial troopers who don't really need the help. It's just frustrating to face, there's not really anything you can do to deal with it, and the Imperial player barely has to make any tradeoffs to take or use it :/
LOVE these ideas. Too bad, cause they rarely make something too good, the designers always seem to mistake on the conservative side.