I can't find the exact quote but PushDustIn kept bring up Sakurai stance on DLC and how it's not possible to continue it and/or it's not that profitable as a reason why we were only getting the initial 5 DLC Fighters and that's it. PushDustIn always goes off of anything that Sakurai said (just like how Sakurai said they're out of budget during Hero's reveal video and that was another reason why more DLC wasn't happening).
I am going on a gut feeling on how they make their DLC and just feel like with the next wave all those character that couldn't get in will have their chance, it would be ridiculous if Piranha Plant was the last fighter and characters like Rex and an ARMS rep are just never allowed to be in Smash Bros at all. So I feel that first 5 were planned early, they saw how well the Fighters Pass did with nobody knowing who they are and were confident that they can continue making DLC for Ultimate.
Honestly, I kind of struggle to see how anyone could ever assume the DLC isn't profitable. For a game like Splatoon? Sure, they hand out all the DLC absolutely free of charge and hold tons of events doing nothing but advertising the game - which everyone who cares about likely already has. Everything else is just brand advertising for Nintendo. I can see Splatoon DLC not being traditionally profitable. Smash, though? Sakurai just talked about how it's easier to manage the DLC due to less needing to be developed and having smaller teams. This is a childish way to look at it, but still somewhat accurate: for 60 dollars, the base game contained 70 something characters, 103 stages, 5 days worth of music, an adventure mode (coughthatnooneaskedforcough), classic mode, etc. For one tenth the price of that, you get well under one tenth of the game's content. They worked on the base game for 4 or 5 years, and like most games nowadays, it has to sell big boy numbers to break even, let alone profit.
I understand that when you're talking DLC, you're probably going to look at less adoption than the base game, but I doubt they could say "not profitable", maybe "not as profitable".
As for your assumption about characters "that couldn't get in", we already went over the nebulous criteria for what makes a character possible, by a source you provided. It is extremely possible that Rex and some ARMS rep probably is never going to make it. Like... let's face it, despite the fact that Zero has been shown to be an
extremely viable character in several fighting games, in Smash he's implied to be as undeserving of an original moveset and a spot on the character select screen as Sans Undertale. What ultimately decides a character that "can" get in isn't what's traditionally argued - popularity, moveset potential, importance, etc. To be extremely honest, it's just about as random as a human being can make it.
Are you serious? We got Banjo last month and Terry could be coming out within a few weeks. What do you think a dry spell is? Do we have to get news every month for it not to be a dry spell? I don't mean to come off as agressive, I just think it's strange how quickly people start complaining about lack of news.
A dry spell, in the information age, is 30 minutes or more without someone acknowledging the product. Reliable leaks have to be coming out around the clock and Nintendo has to tease Smash in every advertisement. Only then is there true, life giving rain.