Is Ditto's Transform supposed to have 0 power?

Solution 1:

Yes, this is correct. Transform does 0 damage. This is in line with its behavior in the core series. Ditto will use Transform at the beginning of the battle, which does no damage, but allows it to take on the moveset, appearance, and stats of the opposing Pokémon.

It's also worth noting that Transform is a move, not a stat. No Pokémon's moves will get stronger as they level up, in this game, or in the core series. The moves will do more damage, yes, but that's due to their stats going up with each level.

Solution 2:

This is correct - transform is not a move that does damage, but instead transforms your pokemon into the one your are fighting, and takes their moves (replacing your moves).

This is unlike Magikarp that has Splash (does 0 damage), and Struggle (does 15 damage), where Splash is actually a move that builds up energy so that it can use Struggle. Unlike Magikarp, Ditto isn't actually useless!