Because Mii costumes are half measures. the point is to make as many characters playable as possible and Mii costumes allow people to have their character, even if not original. It is not a bad idea in theory. But given we have had Goemon, Travis, Altar, CupHead, Sans, Vault Boy, Gil, Heihachi and probably others also that are mii costumes at this point, assuming Mii costumes does not de-confirm means that all of them are still viable options.
I see Mii Costumes as a half measure. For whatever reason, the character in question could not be a full fighter. Have a costume instead. Pretty sure Geno has fallen into that bucket. Remember, Nintendo had a list of characters for Sakurai to choose from am Nintendo also choose Steve, from behind a lowered pair of glasses. I can easily see them considering Geno a non-priority. Only being a Mii costume.