Killian was to Iron Man, what comic Bane originally was to Batman: someone who was only a match for the hero after grinding him down with prep, prep he was only vulnerable to because of personal issues.
Without prep, Stark's house is never blown up, he isn't trying to investigate while wearing junk, he isn't bringing a bunch of junk prototypes to the final battle, just nothing is the same. Killian was a threat because he schemed to weaken Tony before going in with the heat-amped karate-chops.
He's also a lot like the guy he was based off of: The Mandarin, who schemes to weaken Tony before going in the the chi-amped karate-chops.