Would I be correct that your code (with USBUART_Start(USBFS_DEVICE, USBUART_5V_OPERATION)) with D2 installed did work?
In general, I'm not seeing a code issue.
What is powering your kit-059 board with D2 removed?
Check COM14's driver assignment with Device Manager. It should be:usbser.sys and the friendly name should be "Cypress USB UART (COM14)". If this is not the case, attempting to use COM14 might not be the USB device you intend.
Were you able to solve this? Even I'm facing the same issue.
If you're using the USBUART in a conventional UART manner and if you're interested, I created a new component called "Term" that should handle many of the Terminal communication interfaces. As the app designer you can chose to configure "Term" as a standard UART using the standard serial interface or you can configure it to use the USBUART (like that on the CY8CKIT-059). It uses many of the same API commands as the UART component to make it very easy to configure it either way in your code.
Here's a copy of the link to the component library:
I've used this component (and the other components included in the library) on many projects with great success.