He's from the first Mario RPG. Because it's Mario, it's one of the first RPGs certain people ever played, if not their first.
Geno is the stereotypically "cool" and "badass" party member that pops up in lots of RPGs. However, because he's from a Mario game, then for many adults older than I am, Geno was the first time they EVER saw one of those archetypes in an RPG. Everyone has that first "cool" / "badass" party member they became fixated with, whether it's Kain from Final Fantasy IV or Shadow from Final Fantasy VI, etc. A big part of why Cloud is popular is because he's a part of that archetype while also being the main character, and Final Fantasy VII's story explores how this outward attitude of his is actually a facade and how he's actually assuming someone else's identity. And for many players, because Super Mario RPG is, well, a Mario game, Geno was their first time seeing that sort of character in an RPG.
Those kinds of characters make an impression. Geno also has cool powers referencing how he's a toy with removable projectile arms he can shoot bullets out of, which would be fun in Smash (edit: as others have pointed out, this character design is uniquely "Mario" in a mix of being cartoony yet cool, which adds to his appeal). Though Geno does not get a character arc (that's Mallow, who's underrated), he does explain why saving Peach should not be the end of the journey in Super Mario RPG and helps guide the party to collect the pieces of the Star Road and save the world.
None of this makes me think that Geno is anywhere near important enough to get in before Cloud or The Hero or any of the other RPG giants, or even other Mario characters. As someone who enjoyed Super Mario RPG but grew up with and prefers Paper Mario and Mario & Luigi, I would rather see Paper Mario be playable or even Fawful, and the latter is only important in two M&L games. I also dislike how back in the day some Geno supporters used his weird cameo appearance in M&L: Superstar Saga (he explains a seemingly optional mini-game you arbitrarily need to win to progress the plot) as evidence that he's important in the greater Mario canon and thus deserving of a spot in Smash, though to be fair I don't see anyone using that cameo that way these days.
However, all that, plus Sakurai's comment that he wanted to see Geno playable in an interview, plus the Smash 4 Mii Costume of Geno, are all decent points toward the possibility that Geno can happen in Smash Ultimate in the future. So that should explain everything.