Well, I thought I should comment here because Red is my avatar after all, and he has a special place in my gaming memory so here goes.
I'm thinking the most realistic way for Red to return to the game would be to control Squirtle or Ivysaur if they did come back, like in the last game. I can see why it didn't work out for Charizard though because 'Zard is a proud pokemon who imo has more personality being wild, plus it may have issues with its trainer sometimes like in the anime. I don't think Squirtle or Ivy coming back is very likely, but it makes the most sense for Sakurai to implement him in a concept he has used before.
It would be interesting to know what Sakurai thinks about choosing a trainer in specific, in Brawl he chose Red likely because of his pokes but there's also evidence the games consider Red to be more significant than the player characters of the other gens. His appearances as a boss in HGSS and BW2 give evidence that he's looked at by Game Freak to be the most important, and I tend to agree with them. That being said, I really wouldn't mind others being available as long as I could choose to play as Red.
Now, in my ideal picture of Smash 4 I'd see Red as his own playable character, able to fight with enemies instead of on the sidelines. To do this, he'd mix a few punches and kicks with specials mainly using Zelda's phantom idea like earlier. I don't think the Rosalina idea is a good one since you would probably need much more control and versatility than Luma allows, plus there's a one pokemon restriction. I think a better idea instead would be to use Pokemon as specials and maybe smash attacks (neutral B would be a pokeball like Yoshi's egg though) and base the Trainer's other attacks off of his items he uses in the games (such as using the bicycle as a dash attack etc.) This would make him similar to Villager, another character people didn't see fighting at first. I see more than enough source material in the games to create a moveset for Red though.
Overall though I just don't see PKMN Trainer as getting back in the game unless Sakurai changes his moveset completely like I proposed, and based on what happened this time around he didn't seem to think Red was important enough on his own to give this treatment (or else he would have done something to make him playable again.) I think that's a shame and more so he didn't get an AT or something since I believe the Trainers are very important to the games but it's Masahiro's opinion that counts. I'm just thankful we got a cool fighter in 'Zard and so I can move on, even knowing Red would have potential on his own.
So I'd like to see a Pokemon Trainer like Red back in the game, I just don't see it happening as DLC or most likely ever unfortunately. Though, I could see if they brought back one of the protagonists to be playable in another game (particularly Red) between now and Smash 5 I might see more of a chance Sakurai could make it happen. As it stands, I think a lot of his players may be disappointed a little but they have moved on.
One last thing, N3ON I see your posts a lot around places and I think you are pretty cool from what I've read, but I think your response to the OP was harsh. I'm not supporting Trainer more than superficially so I don't have a real interest here, and it was probably wrong for the OP to tag you without asking, but I think it would have sufficed for you to have just ignored him, sent him a PM or posted here saying thanks but no thanks instead of being hurtful in your public response. With a subject as sensitive as character speculation things can get heated quickly so it's best to follow common rules of courtesy and mutual respect.
