Hugely important characters tho. A better argument would be Piranha Plant made it in last time over Toad. Then again, Piranha Plant also made it in over Waluigi and Geno, who where also just as highly requested. See it works both ways.
"Sakurai selected Piranha Plant because a game full of protagonists and major players isn’t terribly interesting. A lineup full of plain-old heroes is boring. Just like Mr. Game & Watch, R.O.B., and Duck Hunt, Piranha Plant brings something special and unique to the roster. He anticipates Piranha Plant to be a rather unconventional fighter."
Sakurai discusses Ultimate’s character selection, Smash as an e-sport and more!
sourcegaming.info
Yeah, nope. Toad and Geno are protagonists of sorts and for that matter, major characters in some games(even Waluigi can say this as he's the starter villain of one game, though he was already an AT before PP would become DLC, so that didn't matter anyway timing-wise).
None of those could've made it in over PP. They didn't fit a very particular criteria Sakurai was going for. At most, Waluigi could arguably be this, but he's had some roles in a few spin-offs that are a bit higher than others, so that muddies things. Toad and Geno have been main characters respectively, so they obviously cannot count.
So again, the only ones who made it in over Toad were already in a very unique spot where it made sense; Mario, Bowser, Peach, Luigi(again, being a clone is not as special of a case as the other ones, as he would've been in Melee then, whether more unique or not. But you can still throw him into the special category either way), and Rosalina & Luma.
Meanwhile, you had Bowser Jr.(only possible due to the Koopa Clown Car, and almost didn't make it in anyway), Luigi(still a clone arrival first, if you think he better fits here), Dr. Mario(clone), and Daisy(clone), and Piranha Plant(specifically neither a protagonist or major character in a game).
Among the 9, only 4 or 5 out of 9 really kept him from getting in, and even then, only Rosalina & Luma even could count as someone who got in over him. Toad was never getting in over Bowser, Mario, Peach, (and Luigi). Rosalina & Luma could've gone either way in comparison, since she was a much smaller character than the other 4, respectively. You could also throw Yoshi in if you really want to, since he's somewhat arbitrarily separate compared to WarioWare and Donkey Kong Country which are blatantly separate series. And Yoshi had multiple of his own games, so of course he was going to beat Toad out for a spot(that, and Yoshi had skills quite unique to him while Toad, like it or not, didn't really have at the time. Peach still does, even if it's something like a Frying Pan strike, but also, her hovering gave her unique aerials that don't work outside of it).
Special Cases have unique criteria that other characters simply cannot have, so blaming all the Mario cast is very silly and doesn't make any sense. When in reality only one character really got in over Toad in a situation he could even legitimately be added. At best.
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That said, all Sakurai has to do is come with a cool idea for what he wants to see out of Toad and the issue is solved. It's not hard to change Peach and Daisy's stuff to something else. You can make the throws the same as Melee/Brawl/4(which for the most part, is just no Toad, but with minor tweaks), and you literally need a new neutral B or to just replace it with an appropriate character.