If a company is successful, why get more expensive? Giving out things for free, especially on games that will remain popular holiday gifts for years, is a positive. It gives a competitive edge. The online was free on the Wii U, a much less popular console, and the Switch's online is no better. So why can't the additional characters at least be free now that the online is paid? Why not some sort of compromise or trade-off to offset certain things? Nintendo only gets greedier as they get more successful.
That's not how business works.
The $5 ($6 individually) you're paying is for a planned, fully-modeled, animated, tested, voiced, and licensed character, including a stage that's also planned, fully-modeled, animated, tested, voiced, and licensed, as well as music that needs to be licensed and in some cases is remixed. Each new fighter also has a unique Classic Mode, which needs to be designed and executed. There's also the spirits that they come with, which requires implementation as well as design and execution of the spirit battles.
On top of all of this, the level of detail in the DLC fighters and their stages is above average compared to everything else. There's an absurd amount of work put into each new character and stages.
That's work that involves dozens of different people, who all need to be paid varying amounts depending on what's required. The licensing is the big thing, especially, since four of these characters are third-party and not owned by Nintendo. Music is also a big thing, because in Japan, sometimes the original composer owns the licensing rights to the music, meaning they need to be paid quite a bit to be willing to license their work (this is why Final Fantasy VII has no music).
All these employees and license-holders need to get paid, and at the end of the day, you want to have a profit, too, for financial security and growth. If you worked a job, and you only earned enough to pay for your basic bills and expenses, and didn't have enough spare money to do anything else, you wouldn't think that was a good job. Or, if you had a job where what you earned wasn't enough to pay for a home or food, then you wouldn't be alive for very long. You want a job that can pay for all your needs and give you some extra cash to be financially secure and let you buy other things you want.
That's not greed. That's common sense.
In fact, during the Wii U era, Nintendo was actually losing money. As in, for like two years, the amount of money they spent was significantly greater than the money they earned. For most companies, that would lead to layoffs--people losing their jobs--as the company strained to cut costs and become profitable again. But Iwata, in one of the most solid testaments to his character, slashed his own salary so they could avoid any layoffs.
Just because companies are big doesn't mean that they're infinite money machines, and that there aren't hundreds of normal people working there just trying to put food on the table.
Also, I don't mind having a full game be a minor update due to the fact that anyone getting into it later only needs to buy the best/most recent one. And if it's physical, it can be bought at a discount.
Ultimate is not a minor update. There's thousands of major and minor changes in almost every facet of the game, including 6 returning characters from Melee and Brawl, as well as 13 newcomers before DLC.
A minor update would be something akin to the many Wii U ports, like Captain Toad or Mario Kart 8 Deluxe. Smash Ultimate is built from the foundation of Smash 4, but is still so radically different that it's an entirely new game.
The way I see it, if the $60 game gives me 70+ characters, that's less than a dollar per character. So $5 for 1 character is a jump. And pre-ordering them is the worst option in every way due to the fact that they are 4.99 individually and 24.99 in full, so you're not only not getting a discount, it's 4 cents more! Pre-ordering characters you don't know about should at least give you a $1 or more discount, not be the same or more expensive.
$60 gives you 70+ characters, 100+ stages, almost 900 music tracks, over 1000 spirits, and the dozens of modes and features across the whole game. Relative to other fighting games that can launch for $60 with under 30 characters and about a dozen stages, Smash Ultimate is one of the most content-packed games ever made. You don't have to like or enjoy every piece of content it offers, but you're getting your money's worth.
So you're not paying $1 per character with the base game. If you were, then you'd be playing just one game mode on a single blank stage with no music, and that'd be the entire game.
Also, your math is off. The characters are $5.99 individually, which is about $30 if all bought individually, but the Fighter's Pass is $24.99, so you save $5 if you buy the fighter's pass. But multiple times, Sakurai has warned everyone to only buy the pass if you are absolutely confident you will like the characters regardless of who they are/don't care who the characters are. You never hear people or companies say to not buy something they're selling, but it shows how sincere Sakurai is.
And like I said, each of these DLC characters is getting extra special treatment. More work is being put into them and their stages than almost all of the previous content. So even if you argued that they're being sold at a slight premium, it's because you're getting premium content.
Besides, Smash Ultimate's online mode is, IMO, not as good as For Glory in Smash 4. In For Glory, you could get into a new match almost instantly instead of the convoluted lobbies and wait lists they have in Ultimate. Smash 4 also has a better Classic mode, Brawl has a better Adventure mode, Melee has better minigames. The only thing superior about Ultimate is the local multiplayer and the amount of controllers you're able to use, something the next Smash game will likely blow out of the water, provided it's not a husk of DLC like it's shaping up to be. Otherwise, the single player parts of the game are comparatively disappointing.
I agree that the single-player components are lacking compared to Melee and Brawl, though I think the Classic Mode is more interesting and unique in Ultimate. Online modes and functionality are also not great, but you'll be hard-pressed to find a Japanese fighting game that has good online. It's a country-wide problem, not just Smash. Western fighting games have had great netcode for years.
Ultimate has a lot more going on than just the "local multiplayer" and "amount of controllers you're able to use." Again, Ultimate is not a minor update. There's hundreds of gameplay tweaks and changes that differentiate it from Smash 4, along with all the new and returning content that's been updated. Whether or not they're changes or content you care about doesn't mean they don't exist.
The next Super Smash game will not be like Ultimate. Sakurai has stated that the choice was either to build a new Smash game from the ground-up, with about 33% the roster size, or build on the foundation of Smash 4 and refine the gameplay and bring in as many characters as possible. He went with the latter decision, and it's why we're going to have a game with all the characters and (almost) stages from every previous game, including ones that were difficult like Cloud.
So the next Super Smash game is actually going to have probably a quarter of the content as Ultimate does, and would essentially be a reboot of the series with completely new gameplay. So if you're looking at Ultimate and feeling ripped-off, be prepared for what the next game will be like. It certainly won't be a "husk of DLC" as you're speculating.