Unlike residents of U.S. territories such as Puerto Rico or Guam, which also have non-voting delegates, D.C. residents are subject to all U.S. federal taxes. In the financial year 2012, D.C. residents and businesses paid $20.7 billion in federal taxes; more than the taxes collected from 19 states and the highest federal taxes per capita.
So in addition to paying the federal tax in the nation, the people who live there are not allowed to determine how those funds are allocated or used. Some other fun restrictions on the District include the President alone assigns the judges for the local courts. It also takes an act of congress to do things like change the city's budget. Basically, if the district wanted to change how its trash was collected, it has to be approved by Congress.
The District did not even have an elected city government until the passage by Congress of the Home Rule Act of 1973. Besides lacking representation in Congress, the city is also deprived of the ability to have ultimate authority over how to spend the money it collects. Every law passed by the DC Council and signed by the mayor needs congressional approval. That includes the budget, even though DC residents and businesses provide a majority of the funds. This means that the Congress can modify DC’s budget any way it wants, even the portion of DC’s budget supported with the city’s own tax dollars.
So, no, the people who live in the District are not underrepresented in the federal government that determines how their local government functions. They are simply not represented at all. But thank you for the snark.