PP was added because they weren't a major player in a game or a hero. I'm not going to argue whether to like the character or not, of course.
The whole "lol funny" thing never made sense to think on. No, it wasn't added for that. Every character was added for an actual reason, even if it was just for a token option. Zero Suit Samus was actually added to include more women and to be a Metroid newcomer, after all.
Waluigi could've easily been the bonus character, being he's neither a hero nor a major player(though given how iconic he is, and actually does start off the story in at least one game, he's technically major at one point. I think he also is one of the bigger characters in some story roles among the sports games, so he probably wasn't an option. That, and PP was a DLC specific character, which was likely well after Waluigi was chosen as an AT, so it's not like they were even in competition with each other).
I very much want Waluigi in, bonus or otherwise, but in most cases, he wasn't really going to be an option at some points. A later on DLC character, sure. But it would've been Pass 2 or nothing. So he's very possible to end the Pass on. Pass 1 as well as the Bonus Character were pretty much taking base game into account, and Waluigi was an AT at that point. So this means either PP was an actual base game character(not likely mind you, but not entirely impossible. A lot of the so-called evidence either doesn't actually support it thoroughly or pretty much says "DLC" at best. Even the amiibo goes the other way, with the actual data specifying PP was always after all the base game characters. If it was base game when it came to any amiibo data as planned, it would've been before all the third parties, probably right before Daisy. The amiibo was quite clearly planned for it to be DLC).
Mind you, I find PP really fun and neat. I don't consider Mooks or Species to be remotely bad. Shy Guy was my personal preference for a Mook, to be under the Yoshi franchise moniker, too. I like the idea of having very unique newcomers along with more major/notable characters. Being iconic is great too(which PP does fall under, and something Sakurai notes when explaining why he chose it to be in), but not the entire thing. A lot of FE characters were added while not being iconic(really, Marth is like... it. Roy kind of is when he returned, due to the Smash Bros. Melee fans. But only to Smash itself). Even ignoring that Pokemon are all species anyway(with some not even being clearly anime/movie versions, like Ivysaur, Squirtle, Greninja(till Ultimate changes its animations), and Incineroar), there's tons of fun characters who don't need to have a particular name to be interesting. It's not that much different from having a Class character in either(Pokemon Trainer, Villager, Hero. Did I miss anyone else? I think that's all the Class characters). Sometimes being generic is fine, since they can still have a fun personality and unique gameplay. And so can Waluigi regardless. We won't know for a long time why Waluigi hasn't been playable yet(even if he's the final DLC character, waiting for the information I would still call being a "long time" in this context). I doubt it has anything to do with being popular with memes, and Sakurai clearly does like his memes, despite what that latest interview suggests. It's gotta be a mistranslation, since he's intentionally had memes with Smash Bros. as is, in-game and even on Miiverse. It's probably just a case of not being sure how to make a flowing moveset. In the case of the Pass, Nintendo would have to suggest Waluigi first. If they never did, which is possible, then of course he couldn't have been chosen. That'd be on Nintendo instead.
