I still think a Friday announcement for a Sakurai Presents to be aired Monday of next week is our best bet.
I think Itsuno's "Dante should be on a Nintendo console before he's eligible for Smash" comment is more of a necessary condition than a sufficient condition. It doesn't automatically get him a spot, but it does put him in the running. It's kinda like saying "Little Timmy passed his grade 10 science class, so he's going to be a doctor". Yes, doctors do need to pass grade 10 science, but just accomplishing that does not guarantee a successful career in medicine.
I think Dante's biggest issue is just that he doesn't have much to set him apart from his contemporaries. Devil May Cry sits a solid 20 million units in terms of lifetime sales, but Dante is still pretty far from being a massive icon like Sonic, Snake, or Cloud. Similarly, DMC has a decent relationship with Nintendo that's improving everyday, but he's not going to be added because of his Nintendo connection like Mega Man, Simon, or Bayonetta. While rumours of him being FP5 greatly increased his popularity for Smash, that was after the final characters were selected. Before that, Dante was decently requested for Smash, but not enough to get him in as a favourite of the core fanbase like Ridley, K. Rool, or Banjo. Dante can't even say he's the definitive option for his company, because he has to compete with Monster Hunter, Phoenix Wright, and Amaterasu.
The only thing that Dante really has in a noteworthy degree is moveset potential, which is great, but not an end-all be-all. He's got a shot to be in Smash, but he too few major strengths to be considered the leading candidate that many currently see him as, IMO.
I totally agree with you with the first point. Dante having his games on Switch doesn't mean he will be in Smash, even if Itsuno words were spoken in the context of Smash.
But for the rest of your post, despite that I can see where you coming from, I don't really agree that much. As Scoliosis has mentioned, anyone is in a bad position against Sonic except for Mario, Pikachu or Pacman. Cloud and Snake are definitely below Sonic if we talk about icons, which is a word that can mean different things depending on the person. For some people, only massive character such as Mario are icons, while for others, lesser known names yet still popular such as Terry Bogard are also icons in it's own way.
Personally, and this is probably a hot take for some people: Dante is a bigger name than Snake. Hey, I adore Metal Gear Solid (my nickname is a direct reference to MGS), but I'm pretty sure few people would argue Snake is bigger than Dante if Sakurai never had added him back in Brawl.
Don't get me wrong, Snake is still a big and popular name in the gaming industry. I know talking like this can sound a bit stupid, but I just think Dante is, at least, in the same imaginary category of iconicity.
To clarify myself, Metal Gear Solid is definitely bigger than DMC, but as for the characters themselves, I feel Dante is as recognizable as Snake.
In any case, I feel you're somewhat downplaying Dante as a character. Maybe it sounds a bit lame, but he and his series could be viewed as the fathers of an entire sub-genre... in a sense, he's basically Bayonetta's ancestor.
People used this kind of legacy arguments to argue that character such as Simon or Hero deserved to be in Smash, so while maybe DMC hasn't been as influential to gaming as those series, it's still a noteworthy point that I think deserves a bit of attention even if the only reason for that is because people tend to bring those points for any of their most wanteds.
Basides that, I'd also argue that character action games during that time were pretty much defined by Devil May Cry and Dante. All the "badass yet also cheeky" thing that Dante embraces, while maybe not original to him, was and is still a part of any protagonist from almost all action games released after the first Devil May Cry games. In other words, you can't really think of crazy action games without thinking about Dante.