Okay, so I don't really want to be that guy (again), but I thought about it and I have some positive opinions on custom equipment.
Now I don't pretend to know all the issues (I certainly know some though), but I really think if we get around some of the worse stuff, then man custom equipment would be hype.
Many of the arguments that I've heard mostly come down to that it would change smash too much, and in a way I have to agree. This would never get off the ground as anything more than a side event, but the ways it changes aren't bad for the most part.
Some of the things are rather positive. If both players know what equipment the other one has, while the set can't be outright practiced against, the effects of all equipment can be predicted. The effects will be wildly varied, but variation adds a lot to the meta game if none of it is broken (I'll get to this later), and the having to learn on the fly adds to the skill cap tremendously, which is also a good thing.
The problem of there not being standardization isn't really true. I haven't studied the game's code in detail by any means, but it does not take an extraordinary mind to deduce that there are limits to the strength of any one piece of equipment, and therefore to any 1 set as well. It'll be hard to achieve this, sure, but that really just makes things interesting. The degree to which any 2 people who grind for equipment the same amount of time differ in strength is probably a good deal less significant than plenty of the differences between characters in the tier lists, which we already accept. Not to mention it makes a sort of fun texture show up in the scene. Different people have different equipment, and some of the stronger ones might be special 'signature weapons' of certain players in an almost cheesy shonen-anime like way. A whole bunch of stupid fun without being horribly unfair. Skill will, in the end, triumph, but there's a whole bunch of hype, dumb fun that goes a long with it. Awesome Side event.
About broken things and what not, broken special effects can be banned. I mean, it feels wrong, but it's the lesser of 2 evils. And for circle camping, there can be things like caps on how fast a custom set can be. There can also be stages custom made that prevent circle camping on them (this could be a perfect use of the custom stage feature and the current custom stage project). And I'm sure there are other things, but I guess the point is that there are work around. Will any of this happen within in the next couple months? Not a chance. But 3 years from now this getting implemented? Sounds like it'd be awesome to me.
Oh, and a couple last thoughts I had on logistics. There is a method I came up with that could solve some issues. First, it would be that all matches have short time and a lat of stocks, let's just say 4 minute 4 stocks (pulled it out of my ass, not necessarily the best one). Is there a match that would normally go super fast? Well, it now takes 4 whole stocks before it ends, reducing variance. A match that would take forever? It ends at a reasonable time. And we have the rules in place for this to work. Time out rules already dictate that the person who took the most stocks/dealt the most damage wins, so it's still pretty fair either way.
And another idea is that, at the beginning of each set, players take their 3ds and upload X sets (lets just say 4 sets) each, distributed among any number of characters they want. This is either done double blind or in some sort of draft order. Then, each player may only pick from those sets for the set. Your choices will, of course, be based on what the opponent has, but it keeps things reasonable and keeps counter picks from being too polarizing, in addition to adding a lot of strategy. Additionally, it front loads all of the set loading, so there's no going back mid set to load a new set. I can imagine the last 2 slots in AA's custom move project can be used for this, so you can safely use all of the same consoles you use for singles and doubles for custom equipment matches.
Now, once again, I don't have all the answers, and I understand not all the answers will be easy to find, but man if we do find them this would be so much fun. I'd tune in for equipment streams, that's for sure.