PostgreSQL parameterized Order By / Limit in table function

There is nothing wrong with a plpgsql function for anything a little more complex. The only situation where performance can suffer is when a plpgsql function is nested, because the query planner cannot further optimize the contained code in the context of the outer query which may or may not make it slower.
More details in this later answer:

• Difference between language sql and language plpgsql in PostgreSQL functions

This is much simpler than lots of CASE clauses in a query:

CREATE OR REPLACE FUNCTION get_stuff(_param text, _orderby text, _limit int)
  RETURNS SETOF stuff AS
$func$
BEGIN
   RETURN QUERY EXECUTE '
      SELECT *
      FROM   stuff
      WHERE  col = $1
      ORDER  BY ' || quote_ident(_orderby) || ' ASC
      LIMIT  $2'
   USING _param, _limit;
END
$func$  LANGUAGE plpgsql;

Call:

SELECT * FROM get_stuff('hello', 'col2', 100);

Notes

Use RETURN QUERY EXECUTE to return the results of query in one go.

Use quote_ident() for identifiers to safeguard against SQLi.
Or format() for anything more complex. See:

• Table name as a PostgreSQL function parameter

Pass parameter values with the USING clause to avoid casting, quoting and SQLi once again.

Be careful not to create naming conflicts between parameters and column names. I prefixed parameter names with an underscore (_) in the example. Just my personal preference.

Your second function after the edit cannot work, because you only return parent while the return type is declared SETOF stuff. You can declare any return type you like, but actual return values have to match the declaration. You might want to use RETURNS TABLE for that.

If your function is stable (does not modify the database), the query planner will typically inline it. Therefore, doing SELECT * FROM getStuff('x') LIMIT 10 will produce the same query plan as if the limit were inside getStuff().

However, you need to tell PG your function is stable by declaring it as such:

CREATE OR REPLACE FUNCTION getStuff(param varchar)
RETURNS setof STUFF
LANGUAGE SQL
STABLE
AS $$ ... $$;

Now doing EXPLAIN SELECT * FROM getStuff('x') LIMIT 1 should produce the same query plan as writing out the equivalent query would.

The inlining should also work for ORDER BY clauses outside the function. But if you wanted to parameterize the function to determine the order by, you could do it like this to also control the sort direction:

CREATE FUNCTION sort_stuff(sort_col TEXT, sort_dir TEXT DEFAULT 'asc')
RETURNS SETOF stuff
LANGUAGE SQL
STABLE
AS $$
    SELECT *
    FROM stuff
    ORDER BY
      -- Simplified to NULL if not sorting in ascending order.
      CASE WHEN sort_dir = 'asc' THEN
          CASE sort_col
              -- Check for each possible value of sort_col.
              WHEN 'col1' THEN col1
              WHEN 'col2' THEN col2
              WHEN 'col3' THEN col3
              --- etc.
              ELSE NULL
          END
      ELSE
          NULL
      END
      ASC,

      -- Same as before, but for sort_dir = 'desc'
      CASE WHEN sort_dir = 'desc' THEN
          CASE sort_col
              WHEN 'col1' THEN col1
              WHEN 'col2' THEN col2
              WHEN 'col3' THEN col3
              ELSE NULL
          END
      ELSE
          NULL
      END
      DESC
$$;

As long as sort_col and sort_dir are constant within the query, the query planner should be able to simplify the verbose looking query to

SELECT *
FROM stuff
ORDER BY <sort_col> <sort_dir>

which you can verify using EXPLAIN.