Mega Man's kit is well-constructed and he has the tools he needs to play his game. His neutral is oppressive for a lot of characters to deal with. Unfortunately he has a fairly high skill floor (at least for high-level tournament play) which limits his appearances despite his popularity. And, unlike Capcom's other Smash rep, he arguably has fewer tools than the rest of the cast (I know jab, FTilt, and NAir have small functional differences don't kill me). That, along with his lack of conventional CQC tools, give him a real weakness in a metagame where protracted, often lethal combos are the norm and burst conversions and critical (two areas he's lacking in). He plays a gradual grinder, neutral-heavy game that isn't very forgiving.
That said, I still think Mega Man can perform well. His aerial weaving ability is one of the best in the game, and he has a rather good grab for a zoner. I sometimes feel like his best playstyle is simply frustrating the opponent into making mistakes so he can get a kill confirm. To play off of Nobie's post about tournament fatigue, I could see Mega Man being a choice for late in bracket where your opponents are more likely to be mentally drained. Then again, this is coming from my experience fighting against him, and it has some obvious flaws (the Mega Man player may be exhausted as well, and one is more likely to encounter his hard matchups late in bracket).
In any case, I find it interesting that almost all of Kameme's characters (Mega Man, Sheik, Yoshi, Dark Pit) play a very neutral heavy game but struggle to close stocks.