It's catered to both. The whole point of Smash is that it can be played in as many ways as possible, including competitively. People like to pretend that Sakurai is some demon that is out to murder the competitive crowd, but that's simply not true. They have to make trophies, single player modes, tons of stages, and all kinds of stuff, and that putting effort into that means they aren't putting all of their effort into the competitive scene. It doesn't mean they hate the competitive scene, it just means they have a lot of other mouths to feed. If they really wanted to kill the competitive scene, they'd just remove stocks and item switches.
P.S. Brawl was very likely not meant to be as terrible as it is. He did simplify it in reaction to Melee, but it also went through years and years of development hell, and they eventually just gave up and released it after years of delays. A lot of the stuff in Brawl that makes it garbage was due to neglect, not because they actually wanted it that way.