I don't think Sakurai will be taking from the fighting genre quite as much anymore. Ryu and Ken were a big thing since Street Fighter is like THE reference for the genre, and then Terry was the cherry on top, with Fatal Fury and King of Fighters being quite huge as well. But after that, are there really series that came as close as these two?
That, and I think Sakurai would prefer to keep away from getting too close to pure fighting games. It's one thing for Smash to recognize those other series and celebrate them, but it's another to become one of them. Smash is a hybrid game with lots of mixed and mashed content, I don't think they'd want to go too far towards one genre.
But yeah, that's my perception of what I think is Nintendo's and Sakurai's perception about the game. Take it as you will!
I mean you could argue the same with platformers or RPGS. "Mario and Sonic are enough when it comes to platformer characters", "Cloud and Hero work very well if we talk about repping JRPGs", etc.
Not trying to sound rude, but I don't know, I'll never get why people only talk like this when it's about FGC characters, when we only have 3 characters that fit the bill. And these opinions already existed prior to Terry.
Obviously each one has his personal opinion and his preferences. But I don't know, I don't really see any logic in "Sakurai not adding more FGC fighters because he doesn't want to make Smash a traditional fighting game".
While Ryu, Ken and Terry are obviously similar as how they play in their home series, it's not like they're 100% identical. In the end, they're translated into Smash. If characters could be added so easily, just copy & paste, we would already have Heihachi, and as we all know that wasn't the case because it was difficult for Sakurai to translate in Smash the 'Tekken playstyle'.
I'm not sure what the intent was with calling it a celebration of gaming, but I know it wasn't meant as a tool for people on the internet to gatekeep first-parties.
While maybe there's some people using the "celebration of gaming" thing to gatekeep first parties, I don't think most people is doing that. But I can see why they're like this. Technically, Ultimate already covers most of Nintendo IPs. If some franchises are well or badly represented, that's another matter. So it's not really like Nintendo has a lot to offer if they want to see completely new IPs being added to Smash.
Maybe ARMS isn't a name that expands Ultimate a lot as a crossover, but it does the job for me. Personally, I'd rather have new franchises or at least, characters from series without a playable character. For that reason I'm completely okay with ARMS, same for another potential choices such as Astral Chain or Ring Fit. But hey, if they add, idk, another Mario character, I won't be pissed because the crossover isn't expanding, even if that's what I'd like the most for Ultimate.
Everyone has the right to feel how they feel about this thing. I don't think that my stance on this is more valid than yours, assuming it's different from mine, neither I think yours is more valid than mine.
But I don't think it's difficult to see why some folks would rather have completely new things when Ultimate's pretty much an once in a lifetime thing.