So maybe you (or anyone else) can answer the questions from from dissecting your sentence between quotes above :
-Does no bad matchups means MK is unbeatable?
-How is a character winning everything effects negatively on competitive play?
-How does character usage affects competitive play in a bad way that requires nerfs or a ban?
-How is a character earning the most money bad for competitive play?
-How do you determine what keeps a character "legal" BEFORE deciding to nerf him?
-How is domination by one character bad?
-If by "doesn't work" you mean MK still winning, what exactly do you mean by "working"? Why do you not want MK winning in the first place?
Arbitrariness and subjectivity aside.
1. Define "beatable". Beatable as in has counters, beatable as in other equal characters/strategies to employ, beatable as in there is no equal but other characters/strategies aren't voided, or beatable as in hard counters everything in the game but you can still win if the other person plays wrong.
Beatable is a subjective term. If you use Pokemon as an example (I wouldn't, but there are certain things you can take from it). Every Pokemon and every Pokemon set possible has a counter. Uber pokemon, despite being "beatable" since they clearly have counters or trouble pokemon/types/moves, are restricted from playing with other Pokemon for being too centralizing and requiring in effect too much effort to beat. You CAN counter Kyogre, Darkrai, Mewtwo, even Wobuffet (he has bad pokemon/moves to deal with, but it's hard to exploit because of Shadow Tag *nerdy Pokemon stuff*), but the effort you would have to put in would be immense and risky unless you turned to using them yourself, which further leads to a cycle of using them more to counter them better.
2. If a character wins everything or a lot, depending on to what degree he is winning you can reasonably interpret it as unhealthy for the game. Especially if you can see the effect it has on character diversity.
It is ok for the best character in the game to make the most money, AND for him to make more money than other characters. However, at the same time, if the best character makes a significant amount of money, a VERY significant amount of money also compared to other characters, that should at least raise some eyebrows. People are not mad that MK makes more money than Snake or has the most national tourney wins. BUT, if the gap win wise and money wise is quite large, you can't blame people for going "Hey wait a minute, maybe we should question this level of success".
3. I'm not entirely sure what you mean by this, but I'm assuming you're talking about whether/how being the best character calls for nerfs/bans.
Being the best character in the game does not inherently mean nerfs and bans are called for. What you need to look at is what the margin is from best character to everyone else. Being barely the best character? No problem. Being the best character by a larger margin? At least deserves some discussion.
MK is not targeted for simply "being the best". He's targeted for being "too much best" lol.
4. As I expanded on this earlier, winning the most money is not inherently a problem. You need to look at what margin of success he has over the rest of the cast. Earning a significant portion more than the other characters, earning a significant portion of total tournament winnings, or a combination of both calls for discussion.
5. What do you mean "determine" what keeps a character legal? Criteria laid out for characters is traditionally "a line in the sand" of what is too much. Of whether a character is broken or not and deserves action. Characters are kept in the game unless/until they break this boundary.
Before you say anything, yes the boundary is subjective, no there is no objective boundary or absolute boundary, and there is no possible way of changing that. Otherwise, it would have been done a long time ago.
6. Again, it's not the inherent idea of 1 character being better than the others. This is expected for any game. The question is if the best character is best by a significant margin over the others. Being "king" over other champs is ok. Being "God" over other champs is not. If that comparison illustrates it more clearly.
7. People don't want MK winning "too much." It's not "I don't want to see MK win ever", it's "I don't want to see MK win all the time".
AND to end all of this:
ALL of this is subjective. Every bit of it. Why? Because you can't make it objective. Every question asked about whether to ban MK or not is based on "is he too much/does he cross the line/etc".
What IS too much? Where do you DRAW the line? Don't tell me you know of some objective, irrefutable, ancient wisdom passed through the generations on stone tablets answer to this.
Tell me an objective approach to banning or defining when to ban a character. That includes defining exactly where the line is, NOT simply saying "ban it when it's broken" without giving a definition of Broken, which also happens to be subjective in itself. How much money, how dominant, how much of a negative impact on the scene, how much centralization, how much "broken" or bad traits to be observed or the degree of these traits, etc.
TL:DR
Deciding whether a character is problematic or not is ALWAYS a subjective process. You can ask people to "prove" why they think a certain amount is too much or not enough, but you cannot ask them to explain objectively why he is too much, because any criteria you come up with will be subjective. If you're not willing to accept that the "standard" for banning a character, no matter how low or high it is set, will inherently be subjective, then you can go no further in trying to establish what to do with a character regardless of his status.