I feel the reason people are quick to disregard characters like Waluigi and Hugh Neutron as "joke/meme picks" is because they're viewing comical franchises through the lens used to view action franchises - specifically anime.
If Jimmy Neutron were a shonen anime, Hugh would be an absurd choice for NASB - but Jimmy Neutron isn't a shonen anime, it's a slice of life episodic children's cartoon; where every character's primary function is to either tell or cause jokes and action setpieces are played entirely for comedy.
If Mario were an epic JRPG series, Waluigi would also be an absurd choice for Smash - but Mario isn't a JRPG, it's a primarily party game/platformer franchise featuring silly; whimsical characters who tend to be on good terms regardless of moral alignment and have generally the same powers and power level.
If Jimmy Neutron were a shonen anime, Hugh would be an absurd choice for NASB - but Jimmy Neutron isn't a shonen anime, it's a slice of life episodic children's cartoon; where every character's primary function is to either tell or cause jokes and action setpieces are played entirely for comedy.
If Mario were an epic JRPG series, Waluigi would also be an absurd choice for Smash - but Mario isn't a JRPG, it's a primarily party game/platformer franchise featuring silly; whimsical characters who tend to be on good terms regardless of moral alignment and have generally the same powers and power level.