I think the thing is that you're looking at it from a "why wouldn't Nintendo take him" angle, when the real problem comes from the "why would Microsoft give him" angle.
Well, okay, but you could apply that to Banjo and Steve as well?
I mean, putting any character in Smash from an outside company is win-win. If MC got in Smash, Nintendo fans might say "who's this guy? I want to play Halo," whereas Halo fans might say "MC's in Smash? Alright, I'm gonna play it." From a financial standpoint, it absolutely makes sense. From an artistic one though? Well...
Well, take Cloud. Final Fantasy was Nintendo exclusive from FF1-6, but FF7 was PS1 exclusive; a console that rivalled the N64, and mocked the N64 in its marketing. Yet Cloud gets in, rather than, say, Cecil, or Tera. And why? Because FF7 is the most popular FF game, and Cloud's the 'face' of FF7, so do the math.
(Which is more than Square Enix can with their FF games
Then everyone would suffer like G did. Do you want that?
Alright, hand on my heart, I burst out laughing when I read that, so well played.
Fighting games live on crossover appeal. It's do or die. It's not like the old days, but this is not a bad thing. Genres and games evole, and Smas has become something more than Nintendo. It's a celebration of all things games, and that in itself is a heartwarming-awesome moment. I would not have it any other way. Something Yahtzee will never understand. Plus, Nintendo already have most of the their franchises in the game any ways. Another super obscure game or character from Big N is not gonna make much of a difference at this point. Let the other non-Nintendo IPs get theres.
Well, sort of. Mortal Kombat went down a similar route with its most recent entry, bringing in characters that, to be frank, really had no business being there IMO. Obviously any industry is going to make a compromise between art and profit, but I can't say its heartening to watch. I mean, yeah, sure, I played as Link a lot in Soul Calibur II, but that was one guest character out of an entire roster. I figure though if you want a "celebration of all things games," then actually make a game where that's its mission statement. Smash started out as a "celebration of all things Nintendo," after all, and to be frank, there's still holes in the roster. Like, why have another FE swordsman when you could throw in Isaac from Golden Sun? Why have Steve (a guy who builds things), when you could have Andy from Advance Wars (a guy who fixes things)? I mean, yeah, sure, I'm biaised as hell when it comes to those IPs, but it's not like there's other Nintendo IPs that still don't have playable characters. And even in the realm of exposure, again, does Cloud for instance need any more exposure? Does Steve? If we're making the argument of exposing non-Nintendo IPs, a lot of the IPs in question aren't obscure. That's the point of spotlighting them.