The million dollar question with this idea is "Why would we spend resources spotlighting these characters if we're not going to do anything with them in the main game?". It's counterproductive, especially since spotlighting them in a story trailer would be arguably more love than a few actually returning characters would be getting (say, duck hunt if they aren't cut).
The other one would be asked by the fans, and it'd be "Is this story mode gonna be worth seeing characters I want to return instead getting an entire trailer dedicated to them being barred from base game at least?". If the story mode is WoL2 rather than subspace 2 (very likely considering how big the roster will most likely be) I think the answer would be very much be "id rather the single player dev time was spent towards making those characters return instead". Overreaction on my part? Yes, but that's the tradeoff you're suggesting exists with this approach.
I think characters straight up dying in canon works in stories like [insert regular fighting game] , but Smash is pretty much toys fighting each other. It's for all intents and purposes a dream match. The story really doesn't matter as much as the sandbox aspect at this point, and purposely going against that expectation, while novel, is just creating a lot of unnecessary friction for little gain.