The replays are not video files until converted to Youtube, what they are instead is a series of codes based off of recognized inputs. Basically, it's like giving actors (the characters played in the specific match in this case) a script based off of you and your opponents performance. The game loads the characters that were played, and they read and react exactly to the code/inputs or "script" given to them. This is probably done to save space, as 1080p 60fps videos take up quite a lot of room, and the Wii U doesn't have much space built into it.
Anyway, when the script/code changes, the replays are obsolete because the script cannot be performed or recognized, because it was altered and/or no longer exists.
For example, getting a kill with Diddy pre-nerf via upair would happen much earlier than now, which would crash the replays if the new script/code were injected into older replays, since the scaling of knockback Diddy had no longer exists. The upair wouldn't kill, and the replay would be altered mid-match, leaving your actor with a different script, changing the perfotmance completely.
Sorry if this sounds confusing--I tried to make sense of it all!
Edit: Grammar fixes!
