What would you say about bans based on things other than power? (Excellent example about Ice Climbers hypothetical here)
That's a really good question to consider, so let's talk about the factors that would influence this hypothetical situation.
Without any outside interference, I think you'd find both the audience and players walk. Why play if you have a game that degenerate and boring, even if it's balanced? However, there are external factors. Sense of community is one, and more compellingly...
prize money. If you could pick up a paycheck running these hypothetical 'balanced but astonishingly boring' Ice Climbers, why wouldn't you? Money can prop up a bad situation in gaming.
Bayo is an analogous case where you can get a kill combo with limited interaction even at low percentages. (Goes on to explain examples between Bayonetta vs. Pikachu)
...You're raising a good point, and it's one I don't have a perfect answer for, but... I'll keep it in mind as you move to your next question.
Not saying Bayo should be banned, but this would bring up a question of is it worth it to ban a character for making the game a worse spectator sport or less fun to play, even if they're not grossly OP?
This requires weighing a lot of factors. Is the game viable enough as a spectator sport if we fix this, to be worth the ban? Is it worth that significant ding to the Playing To Win philosophy that otherwise guides us in fighting game tournaments?
Can we fix it some other way? For example, can we present clear evidence to the game's developer/publisher that there's a problem here but it can be fixed and doing so will help the long-term health of the game? I know, this chafes the old-school sensibility of "Don't whine for nerfs; ADAPT, GIT GUD." I'm sympathetic to that viewpoint up to a point, but the question really has to be asked: "Is compromising a little bit on this worth the gains in other aspects of the game's competitive scene?"
I am not qualified to answer that for the Smash community. I can raise the question in response to your excellent question, but I'm sure as hell not the person to answer them for you.
Imo the commentators and certain pros were already doing a pretty good job talking about how you could SDI/DI out of Bayo combos in certain situations or pick certain characters, but here I think trust issues currently get in the way. Viewers might believe that commentators are artificially toning down the character's issues because they have a vested interest in hyping up the stream. And like I mentioned above, the existence of counterplay might not convince viewers that Bayo games are fun to watch.
...Yeah... yeah. I don't have a perfect answer here either. Nonetheless, these people are in a special position to control the narrative and frame the topics that get discussed. Think about how TV news works; do you think about various topics in economics, politics, the job market, and so on without some kind of prompting? Do you think about certain buzzword issues before someone in the media prompts you to do so? For some people, the answer is "Yes, I do think outside that sphere." Yet even they at least have to spend some 'mental bandwidth' processing the idea put before them and decide whether to ignore it or not.
Streamers, top players, Smashboards writers, TOs, and those with popular Smash social media accounts are in that same position of being able to really drive what gets discussed. Right now, I think the two-fold concern of "We need to figure out how to deal with these kind of Character issues" and "we need to cut down on harassment so a repeat of Evo 2018 doesn't happen" are things that should be on the Smash community's 'airwaves.'
A strong PR push can at least help alleviate these issues, and I think it's worth doing. We're at a point where players are receiving death threats, serial harassment at majors, and in response they're turning majors into jokes. That's a good sign that this needs to be fixed.