I'd be interested to see it in practice, but just from a theory stance, my thoughts:
A lot of already-bad or sub-best characters become worse. Samus, Robin, Falco, the Links, the Psykids, Mewtwo, Wii Fit, and the Pits all sound like they'd get it pretty rough. Mii Gunner would probably drop to worst character from near-worst character if one assumed high-skill near-perfect play.
Depending on the implementation, it may not even help that much against Sheik. If the active reflecting time was particularly short (not honestly acquainted with how many projectiles you could reflect per shield in Melee), you'd get one Needle back to Sheik for every several that hit your shield, and while that's more appreciable than zero, you still have the above list of characters who lost major parts of their neutral game to slightly hinder Sheik's, to say nothing of her vast array of other valid options compared to those mentioned.
Again, I'd be interested to see it and how it worked in practice, but just my straight hunch suggests that it would do more harm than good based on current standings. When you think about it, even Fox, with a fairly quick reflector, can't really depend on it against Sheik or Zamus just due to the downsides of being caught in reflector.