It's not that jigglypuff is entirely nonviable if you play as gay as possible, it's just other BETTER characters can play gayer or not play as gay and still win. I'd rather have fun than just float around the whole match, that would get boring after a small amount of time.
At the end of the day, Jigglypuff is an inferior version of Wario. Wario has Jigglypuff's aerial prowess, great recovery, gimping power and slippery-ness (which probably isn't a word), but as well as that he has:
- More reliable kill moves and kill move set-ups.
- Much more survivability due to his weight.
- A ground game that's actually usable.
- Projectiles (sort of)
What advantages does Jigglypuff have over Wario? She doesn't get wrecked by grab releases, but since both of them are very hard to grab anyway that doesn't make much difference. Other than that... er...
If you're playing solely to win, there's no reason to use Jigglypuff over Wario. That's why she has such little rep; anyone who could potentially use her really well is using Wario instead.