My objection to Lucky Chloe wasn't in that she was dumb or too silly. I mean, I do think she's dumb, but that's never stopped me from enjoying several fighting games before. Or just many games, in general.
It also wasn't that she was 'stereotypical'. No, stereotypical is not the right word to describe her.
Being one who does work his way through various Japanese animation, as well as video games heavy in Japanese flavor, I am no stranger to the concept of cat girls. Like any media, you start to notice certain patterns and trends in character types, and the pattern with cat girls is very, VERY easy to pick up on. The other thing that Japanese media has made me more acquainted with than I'd like is the pop idol, which Chloe is also.
The second I saw Chloe's design, I instantly knew how her voice would sound, what her physical mannerisms would be, and how she would speak. Well, I didn't predict the constant Engrish, actually, but I did predict her random 'nya', in the middle of fighting.
Stereotypical is not the right word to describe her. The word to describe her is 'generic', and that's my objection to her. I think that she is generic otaku-bait that had very little in terms of creativity put into her character.
That said, I think that the stink raised over her went too far, as I feel with many controversies. Oversimplify, then over-exaggerate. I didn't think she should be removed. I think she should have been improved, but I'm pretty sure that wasn't going to happen, at least not to my tastes.