I don't see why people are against 3rd Parties in Sony's game. I mean, think about it; many big name titles are 3rd Parties. MGS4 comes right to mind. Spyro and Crash, old PS mascots, should be allowed as well.
EDIT: Final Fantasy has been typically a PS series for years, so maybe including that overrated Cloud would help sales within the FF fantard community.
EDIT: Sakurai counts transformations and he also counts Yoshi and Wario as Mario characters, despite the different icons. (Oh, and he counts Donkey Kong as well, because of the Melee Event Match "All-Star Match 1", where you have to fight Mario, Peach, Bowser, Yoshi, and Donkey Kong one by one. Luigi and Dr. Mario were unlockable and featured in later All-Star Matches. Not sure if he counts Diddy Kong, though I wouldn't be surprised...)
So if we go by that:
Mario: Mario, Peach, Bowser, Luigi, Yoshi, Wario, Donkey Kong, Diddy Kong. (8)
Zelda: Link, Zelda, Sheik, Ganondorf, Toon Link. (5)
Pokemon: Pikachu, Squirtle, Ivysaur, Charizard, Lucario, Jigglypuff. (6)
Now, if we factor in the cut characters, each gets 2+ (Mario gets Dr. Mario and Dixie Kong, Zelda gets Toon Zelda and Toon Sheik, and Pokemon gets Mewtwo and Plusle & Minun).
So if plans met through, Mario would have 10 characters, Zelda would have 7, and Pokemon would have 8.