Of course they cannot over rep gen 1. It just epends what you think 'over rep' means. It is by far the most iconic one, and all generations of pokemon are NOT made equal, not even in terms of content (nmerically OR in terms of what they introduce). In that regard, gens 2 and 5 really dont even matter.
Now, please explain to me why you think Greninja is a spiritual successor to Squirtle. I went in depth as to how this doesn't even make sense without a grass starter, particularly since they play nothing alike. This is more akin to Lucario being a spiritual successor to Pichu. I ask you to explain this to me.
The first part is subjective, because every generation has sold well.
The second part, all I meant, is that putting two water starters in would be asinine. So they picked the more recent one to rep their newest game, the one people are aware of. Yea gamers know squirtle, but the average 10 year old now hasnt even seen a gameboy advance unless he's a hardcore pokemon fan. People on these boards get hung up on their favorites, and thats fine. But between an old water starter from a gen thats over 15 year olds, and the most recent one from a game thats still popular, you take the new one every time. You love trainer, we know that, I liked him too, but he's not gonna work in this game and theres no logical way to justify including a second water starter and the least popular starter from gen 1's least popular evolutionary line.
tl;dr There's no way to justify 2 water starters in the same game without cutting other pokemon, and who from the list is less important than squirtle (besides arguably jigglypuff who relavence to smash probably redeems her)