Lao is probably top ten, but I wouldn't put him in S. He has great tools and arguably the greatest overall mobility, but he still has some defensive holes and his counterpoke game is seriously lacking. He just doesn't have any decent mid-hitting footsie tools outside of the roll, and the roll is more about closing space than getting damage. It doesn't combo on hit, and it's disadvantage on block. You CAN create a mixup on block by doing roll into spin, low hat or teleport, but all of these options can get blown up if they're read. It's somewhat safer if you do roll into EX spin, since that's a lot harder to punish if you're not actively looking for it.
When I did my own tier list, I believe I had Lao right around 8th. My top five was something like Kabal, Raiden, Cyrax, Kenshi, Sonya. The rest of top ten consisted of Sektor, Skarlet, Lao, Kitana, Smoke. Jax, Shang, Reptile and Freddy are all in contention for top ten as well, though I think Freddy is somewhat overrated.