Hot take: Waluigi and Toad are the 2 most glaring omissions from the roster and deserved to get in before characters like Terry, Min Min, Byleth and Piranha Plant, and arguably the majority of the DLC characters we got besides maybe Steve.
I could see the Argument for it. Waluigi is not the most important character within the Mario Franchise, and ultimately is just an extra within a series that's already gained pretty much it's main cast and then some
Having said that, Mario is a big franchise, and Nintendo Fans probably are more familiar with Waluigi then a character like Min Min, Byleth, Pyra/Mythra, Terry, etc, and Since Mario is already represented within the game, people playing Smash are gonna be asking where Waluigi is
And this especially goes for Toad since he's been a big part of the Mario Series, unlike Waluigi. I guess what I'll say is that if people were looking at the Base roster, More people would be wondering where Toad or Waluigi is, rather than Byleth, Terry, and Especially Piranha Plant (if they didn't get pre-order)
I would argue for Steve, Hero, and to a lesser extent Sephiroth. Steve with Minecraft doesn't really need much explanation. Dragon Quest has had a large history with Nintendo, and is a phenomenon in Japan, so Japanese fans might have been asking for where Hero was. FF7 is not a game that's heavily associated with Nintendo, but it has been a high selling game on the Eshop, it's popular game in general, Final Fantasy as a Series is popular, and Cloud is already in the game, so you might get people asking about Sephiroth also
With all of this being said though, I think even if Waluigi and Toad might be more glaring omissions than some of the characters we've gotten so far, I don't think that automatically entitles them to a Roster spot, especially through DLC. There's just more that goes into creating a Fighter in Smash than just the Popularity and Iconic status of characters. There's a reason I don't see the most requests for Toad, despite how well known the character is, is all I would say
The characters we've gotten, while on the surface might not be seen as Glaring of a omission than characters like Toad and Waluigi, What they add to the game perhaps could be more than what those 2 characters can add, whether it be through the game/Franchise represented, Audience it covers, the moveset, Abilities and personality represented, Legacy and history, etc. Kazuya might not have been a character I think Casuals will go on and say "Where's this guy" since Tekken is not a franchise that's commonly associated with the Audience playing Smash, but that's part of the reason that Kazuya being in Smash adds so much. It's a different beast from what we've gotten yes
In regards to Waluigi specifically, I think though he's got many merits in terms of Joining Smash in actuality. In spite of him not being the most important character in the Mario Franchise, and perhaps Lack of Concrete idea being him in regards to the moveset (Even though he has abilities to use, it's just hard to find an anchor to tie it all together), The fact of the matter is that he's a very popular character both in and outside of Smash, and that Reggie went to go Talk to Sakurai about the possiblity of Waluigi in Smash. I think it would be wrong to make Waluigi out to be a unattainable preposition since he has way more going for him than against him. Will he be in FP2, I'm not sure, there are alot of characters.
Also I'll interject a little of a hot take here also, but a 2nd Sonic character is also one of the biggest omissions on the Roster right now