I think the mechanic works fine. And both transformations cover the other's weaknesses (granted Sheik is all the while better). This is what makes Zelda unique to the roster, not to mention that Sheik is a part of Zelda's moveset because they're the same person.
My belief is frankly the opposite. Why replace Sheik with Impa if they essentially represent the same thing? The game gains nothing from replacing an old character with a new one with the EXACT same moveset.
Am I the only one who thinks that?
The problem with this logic and Sakurai's is that you're trying to balance the two not only against the rest of the cast, but against each other in terms of attributes. Another problem is that the two designs are polar opposites of one another in a very poor attempt at going for a yin-yang approach. Yin and Yang have a little bit of each other in them. Sheik and Zelda do not, thus any synergy they would've had is gone.
Again, there's a hell of a lot more they can do with Zelda. As Project M has shown us, she easily has the potential to be the Mu-12 or Parasoul of the Smash franchise as a frightening trapper/zoner, but her tools are so watered down from what they could be that she stinks. As Habanero mentioned, her biggest issues are her means of approaching (which are none IIRC) and racking up damage. Take a look at this BlazBlue video. Tell me whether or not, with some changes, that Mu-12's playstyle could be implemented into Zelda and make her stand out. There, she's unique without a ****ty gimmick. For a frame of reference, the diamond things are Din's Fire and the Diamond Shield is Nayru's Love.
All separating the two will do is give each side one extra move and their own slot. Zelda will still be ignored and the Sheik side (be it Sheik or Impa) will still dominate.
Separation does absolutely nothing to benefit Zelda (unless that one move she gets in replacement just so happens to be a key move, but the odds of that are rather slim) and the only purpose it serves is to be lazy and just remove a flawed concept entirely instead of trying to fix it as well as appeal to those that get off on what's relevant.
And Sheik as an Impa skin is the same as making Waluigi a Luigi skin.
Inconsistent body frame, as the "Impa as Sheik" thing Diddy posted earlier shows.
Unless making Sheik lanky and anorexic to fit the model seems like a good idea.
No, separating the two can do more than that. As I said above, the problem with the Shelda design is that their attributes against each other which simply doesn't work. There's also still the issue of Zelda's moves being so awful in a game where speed and mobility are king. I almost wonder if the reason Zelda is so weak is because giving her too many options would've made Shelda broken by having too many total options.
And saying Impa on Sheik is like Waluigi on Luigi is not necessarily true. You're forgetting how art styles can change proportions. Case in point, Wind Waker Ganondorf was never fat once you realized that the guys in Wind Waker were deliberately drawn top heavy as seen below.
Sakurai said that Sheik's model was based on a design that was drafted up during the development of Twilight Princess.
However, Hyrule Historia says that the design was drafted specifically for Brawl.
One would think that this is a contradiction, but it's not after closer analysis.
Sakurai only said that the design was drafted up during TP's development; he did not say it was designed for TP itself.
Both may be true in another way. I highly doubt all the concept art we saw in Hyrule Historia was all the concept art that was drawn up during development. It's possible that there was an initial Sheik design for Twilight Princess that never fell into the hands of the public. The design we see in Brawl may have been a revision of this initial design. Still, this is speculating on something we may never know the exact answer to.