I haven't heard that. I read that he intentionally made him super strong (he actually called him a "joker" character), but knew he had to limit his involvement.
"Regret" might've been too strong a word on my part, but I think we're both referring to the same thing (if Wikipedia is to be believed).
Watsuki added that he wanted to use Hiko more often in Rurouni Kenshin, but Hiko is more powerful than Kenshin. Watsuki's editor stated, "(The Master) is like the joker in a card deck." Hiko is, in Watsuki's words, "just too powerful," and so it would be difficult to find a place to use him in the story.[38] Watsuki described Hiko as "the original RuroKen wildcard."[34]