Well, this is my first post here so I'll make it good.
First, I'll try to field a few of the issues people had with Skull Kid being in the game. No, I'm not going to flame people or anything, I'm just going to explain why I think he's viable from the standpoint of someone who loves both MM and the character of MMSkull Kid.
1) Skull Kid is generic and has no story - Well, I guess if you didn't play the game you could come to that conclusion, but if you played the game you'd see he has more personality than any Zelda villian to date (with the exception of post-mask Zant). As someone stated earlier, he doesn't wan't to control the world or steal a princess. Skull Kid is a being who strived for friendship and got horribly rejected. The entire world pretty much cast him aside, and being completely hurt and lonely he found Majora's Mask and began his twisted scheme. Not only does his story have some heart, but he has so much personality in his body movements. He is in NO WAY the generic, tough-but-silent bad guy. There are so many other Smash Characters with less personality than him, this is by far the worst argument against Skull Kid.
2) He has no moves - Well, neither did FOX, SHEIK, C.FALCON, and a bunch of others who appeared in Smash Bros. games. It's not like Nintendo can't make up decent movelists, if they couldn't have the characters would be nonexistant or unfinished. Anyway, I think his moves could work fine. His B moves would be tough but his melee could be done so easily, and they could be original.
3) He's unimportant - He was the main villian of a Zelda game... that's more than you can say about Peach (she's so expendable its ridiculous...), Ice Climbers, any of the Pokemon, etc etc etc.
4) He's one of MANY SKULL KIDS!!! - Yeah, just like how PIKACHU is one of MILLIONS of Pikachu... just like Pichu is one of tones of Pichu, just like Jigglypuff is one of TONS... just like there's an entire race of Kirby's.... Skull Kid, with Majora's mask, just happens to be the ONE important one. The one that stands out. He even says "You smell like that fairy kid who taught me that song in the woods..." so yeah, its the SAME GUY.
Part 2
Movelist Ideas - I think they could make a really fun and original movelist for Skull Kid considering his body language is so weird and people are forgetting he has Tatl and Tael with which to attack. Yeah, they didn't do much besides ram into things on an occasion or two, but for the sake of a Melee movelist, they could put those fairies to good use!
Taunt - Skull Kid does that maniacal laugh he does oh-so-often in Majora's Mask.
Super Smash - Crashes a moon on everyone... common sense.
A - Skull Kid crosses his arms and Tatl shoots forward, charging the attacker like the fairies do in MM. This attacks acts like Pikachu's headbut so yeah, it's spammable.
A A A A A - Read above.
Down-Tilt - Think of Sheik's Dash attack, only hes stationary and crouching, like a two-hand cross-swipe.
Forward-Tilt - Skull Kid pushes his hand forward, Tatl comes out and does a half orbit around the front of Skull Kid
UpTilt - Skullkid raises his hand a little as Tael darts up, hitting opponents. This could be a good juggle.
Forward-Smash - SkullKid thrusts forward with power (shoulderbut-ish), Tatl and Tael also thrust forward with him.
Down-Smash - Skull Kid crouches on the ground and both fairies orbit around him, close to the ground. This is very brief, but quick.
Up-Smash - Skullkid mask-smashes upwards.
Neutral Air - Tatl/Tael flurry frantically all around Skullkid (think Bridget's Starship move in GGXX)
Down Air - Skull kid Stomps down and Tatl/Tael "stomp" too
Forward Air - Does a Sheik-esque swipe forward, Tael assisting
Up Air - Skullkid swipes with his left, then swipes with his right hand above his head
Back Air - Skull kid spins backwards swiping with Tatl (spins like Jiggs Back-Air)
B - Skull Kid shoots a 3burst pellet shot from his flute. If you hold it in for an extra second or two he shoots a 5. Low damage.
Down B - Mask Stare - This is kind of like Mewtwo'd Disable. If the mask stare hits you, you turn into a Deku scrub and are paralyzed for a few seconds, just like Mewtwos.
Forward B - Tentacle Lash. A bunch of tentacles shoot forward out of the mask and lash anything in front of Skull Kid.
Up B - Skull Kid Teleports using Majoras Mask.
Grab - Reaches forward with both arms and grabs.
Throw forward - Skull Kid stomps forward, kicking opponent away.
Throw down - Skull kid throws the opponent down and Tatl/tael pound the opponent a couple times (like fox shooting with the blaster)
Throw Back - Skullkid does a 180 degree swing throw
Throw Up - SkullKid tosses the opponent up and Tatl hits him up again