This matchup is so odd to me. Sheik has good anti-pressure, tech chase, and gimp options and Falco has great combos and edgeguards on Sheik. The matchup is based on how well Sheik can get a grab really, just like in the Falco vs Marth matchup. Of course, if Sheik camps with needles and does stuff like Nair OOS then it'll be hard for Falco to get inside to combo. That's why this matchup is so weird. They both force the other to play a little differently.
In my honest opinion, I think Sheik might beat Falco due to the fact that she can gimp him while he has to rack up damage to win. Sheik also recovers much better than Falco, so she'll probably live longer than him.
To be fair, Falco can simply mix up when he wants to Dair or whatever with laser pressure and Sheik will have a hard time stopping him, even with needles (assuming the Falco player is fully conscious of them). Falco's combos are very effective vs Sheik, and he can just getup from ledge to Dsmash Sheik most of the time for edgeguards.
I have no idea what to rate this matchup other than 50-50 really. I could see it fluctuate a little either way though.