You just called Bomberman "iconic" and Cloud "niche" when the latter's one game has sold more than the former's entire series and is the face of the most popular RPG series in existence.
Bomberman does not make sense at all. He's an old character with non-existent demand and no real outside appeal.
How the hell are Chibi-Robo and Isaac "notable"? Chibi-Robo was always a niche series that died back in the Wii days only to be "revived" by a mediocre platformer on the 3DS. And Golden Sun is another series that bears the dishonor of dying twice-- didn't have a single game between 2002 and 2010 and has had nothing since. And nobody's really clamoring for Paper Mario or Dixie Kong-- even in the fandom echo chamber mostly desires 3rd parties at this point.
Bayonetta and Joker both had a ton of hype around them, because their games had very positive reception and their reveals came out of left field. And Joker both represents the long-running SMT series and is from the most critically acclaimed JRPG of the console generation-- said game was nominated for GotY up against Super Mario Odyssey and Breath of the Wild and has sold 2.7 million units (nearly 3 times as much as Bomberman's best selling game, which isn't even in Konami's top 20).
Maybe if you did a modicum of research and thought about things logically, you wouldn't be nearly as disappointed.
EDIT: Also, I like how you have Bandana Dee but ignore Rex even though the latter consistently does just as well/better than the former in fan polls.
Yes, Bomberman is more iconic than Cloud imo. How many games have Bomberman been the face in his games vs Cloud? You brought up sales numbers as an argument to "prove" that Cloud is more iconic than Bomberman, but I heavily disagree with that statement. How many random people would recognize Cloud vs. Bomberman? Who have been around for the longest amount of time, especially on Nintendo consoles? Who would people call more iconic and "gaming"?
You wrote that Bomberman doesn't make sense at all and that he's an old character that nobody cares about. Which isn't true and thus I won't bother to argue against.
While not the best examples, Isaac and Chibi-Robo at least has (had) their own series going for them and would bring something unique to the table. No offense to Cloud, but who would be more unique in Smash: just another swordsman swinging his sword or another swordsman utilizing psynergy in his moveset/a robot that can utilize many different tools in his moves, like a spoon, toothbrush, his cord, his "pocket" head etc. See, that's the point I wanna make.
Don't underestimate the amount of people wanting Paper Mario and Dixie Kong. At least from Paper Mario fans, we're really quiet, but we're many. Especially in Japan. (Though I don't like the thought that the one screaming the loudest should get their character in Smash, even if it has worked before. But I digress.)
I have never claimed Bayonetta and Joker aren't popular characters. But they sure as heck are niche picks. Yes, Isaac and Chibi-Robo are niche characters too, but at least they are Nintendo characters that could bring a lot to the table uniqueness-wise. Unless I missed it I never saw Bayonetta fans and Joker fans being vocal about having them in Smash. Or at least, not as vocal as the Ridley fans, King K. Rool fans or even the Shulk fans. Just admit it: Joker got in because Sakurai wanted him, and not because there was a massive fan outburst for him. Bayonetta got in just because she was the most realizable character to pick. Sakurai even stated that Bayonetta was easy to implement due to her models already being on the Wii U engine and thus porting those models and animations were no hassle.
Your logic is "the more popular a character is (based on their sales), the higher chance of being picked for Smash they should have", but I think this would mess up Smash a lot. I don't care that much about popularity. Nothing wrong with picking popular characters tbh, but what about characters that could bring something unique to the table instead? I swear, people more often than not forget that this is a Nintendo game focusing on Nintendo characters. Yes, there are a lot more Nintendo characters than not, but it can't be denied that some Nintendo characters are still missing and that third parties gets a little too much attention, especially in the DLC era. (I've touched upon this in my last post.)
Yes, both Bayonetta and Joker brings something unique to the table, but so would Chibi-Robo, Paper Mario, Isaac and Bandana Dee do, with the added bonus that they are Nintendo characters and have been around for longer.
Not denying Rex's popularity, but in how many games has he starred in now again? Of course, he would be a great addition, but is he more unique than say, Paper Mario or Isaac? Still, I would much rather have Rex over Cloud, Bayonetta and Joker combined.
In the end, though, Sakurai and Nintendo pick whoever they want based of whatever. But that doesn't mean I am not allowed to get disappointed.