at this point "all-star" is just a thing people say. im not even 100% sure what its supposed to mean but i dont think its that big a deal
The term "All-Star" may vary in definition depending on who you ask, so I can't speak for everyone. With that said, an "All-Star" in my opinion represents an important or major character that has been a huge part throughout Nintendo's history. As an example, characters like Mario, Link, Inkling, Pikachu, Kirby, and Samus could be considered for their iconicness and importance to gaming as a whole. Other characters like Sheik, Greninja, Dark Samus, Jigglypuff, Palutena, and Corrin could still be considered as popular characters, but their importance to Nintendo pales in comparison to some other characters featured in Smash.
Dixie Kong may be considered by some people as the "last Nintendo all-star" mostly because she was a major playable character in DKC2, DKC3, and DKC Tropical Freeze. The Donkey Kong Country games are among Nintendo's highest selling games of all-time, and Dixie Kong is one of the three main protagonists of the series, next to Donkey Kong and Diddy Kong. When you look at other potential choices that are popular right now, like Geno and Isaac, they lack that same recognizable factor that Dixie Kong has. Not everyone has seen Isaac or Golden Sun before, and likewise with Geno and Super Mario RPG. Not everyone has seen Dixie Kong before either, but it would be really hard to ignore her if you have a passing interest in the Donkey Kong games. If you've heard people talk about some of the greatest platformers of all time, DKC2 may be brought up, and it would be easy to learn of Dixie Kong through that. She is also in Tropical Freeze, which means that people looking into buying a Switch may just naturally come across her when looking for what games to buy.
Feel free to agree or disagree with me, this is all just my opinion. I do think there is some merit to the idea of "Nintendo All-Stars", since many of Nintendo's most famous and important protagonists are playable in Super Smash Bros. Ultimate. It would be a shame to have characters playable like Peach and Samus but not Dixie Kong, she is just as important to Nintendo as they are in my opinion. Dixie is also more important than other female characters already playable in the roster, like Palutena, Corrin, and Rosalina. Dixie Kong has always been a staple of Nintendo ever since the SNES days, I say that she's one of the few characters left that deserves to be an "all-star". I hope Dixie gets added as a playable fighter to Smash Ultimate, I feel like she truly deserves it.