SmashChu has this really annoying habit of taking total nonsense (all stages on, all items on, etc) and throwing in otherwise legitimate ideas with it (Smash community bans things for poor/no reasons, Sirlin).
Chu (assuming you aren't trolling), items are banned because they are "excessively random". Random things tend to detract from competition because they arbitrarily decide the winner. Randomness can be excessive in two ways: if it comes with very little warning, and/or if it's overpowering. So while a few items are arguably fine (Star Rod, Beam Sword, and especially Food come to mind), many are unacceptable (Bob-ombs, soccer balls, containers, Pokeballs, arguably Smash Balls). There is also one stage banned for excessive randomness, and that is WarioWare. Its rewards are too random because they range from nothing to invincibility with no pattern whatsoever. Remember that we're trying to decide who the best player is; excessive randomness gives one player a buff for no reason, and thus acts as essentially a handicap. (Small amounts of randomness are generally okay, because it tests the players' ability to handle unexpected events; however, random factors should not decide the outcome of the match.)
Most stages are banned because they enable some tactic that heavily skews the balance of risk and reward. Sonic has all 100-0 matchups on levels with circle camping, for instance, because opponents cannot get close to him. Many stages with permanent walkoffs or walls are banned (Corneria, Green Hill Zone for instance) because you can sit next to the wall or walkoff and your opponent risks an infinite combo or immediate KO if they try to approach. One stage is banned in part because the skills required of it are "too different" from the ones required of other stages. This is, of course, Mario Bros, which is being discussed in another thread.
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You are right, however, in that lots of things are unnecessarily banned. Luigi's Mansion is legit, for instance, as the circles are not only very small but can be easily destroyed by the non-camping player. It's also quite nonrandom (I think the side platforms disappear randomly, but they might be on a timer). Distant Planet's randomness comes with plenty of warning, with the exception of the pellets which take time to become useful after they've grown. Fears of circle camping have been shown to be nonexistent, and the slant on the walkoff makes many chaingrabs and other abuses less powerful. The bulborb is a random, OHKO hazard, but it is far away from the main part of the stage, gives lots of "warning" (in the sense that it has to be there before it will kill anyone) and is never a problem in top-level play. Finally, the space above the leftmost edge is criticized as an excellent camping spot, but the rain and pellets make approaching it easier than it would be otherwise.
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I feel rather strongly about you because of this last paragraph. You're taking perfectly fine ideas and mixing them with idiotic ones, and it's quite frustrating for me to watch.
Don't take it personally.