I'd really love more Pokemon Trainers in Smash in general though they do come with a ridiculous amount of work.
Which brings me to this concept. The long and short of it is basically making Bulbasaur, Charmeleon and Blastoise sort of "echo fighters" of their respective counterparts on the current Pokemon Trainer's team. New attacks where they are needed with respect to Squirtle's lack of blast canons, Charmelons lack of wings and Bulbasaur's lack of a leaf. On top of that they obviously would have different stats and hit/hurt boxes relative to their character designs from the Pokemon Trainer counterparts.
I do wonder how feasible this would even be? Would it be basically close to the same work at just doing 3 different Pokemon altogether or would this actually be the more streamlined option there is to introduce another Pokemon Trainer to Smash? I imagine that it'd be like implementing Ken's differences to Ryu multiplied by 3 PLUS all the different animations and modeling work necessary so I don't really know if it's feasible. I think regardless though it still would be the path of least resistance to bringing another Pokemon Trainer into the game.
I don't think anyone could argue against Blue's relevance to gaming and Nintendo history or these Pokemon's worthiness with Bulbasaur literally being the very first entry in the Pokedex and Blastoise being just as iconic as Charizard. Chameleon is the odd one out but that's almost a core feature of middle evolutionary Pokemon at this point.
I also wonder what they'd call him in the context of him appearing alongside Red. They could opt for "Rival Pokemon Trainer" if they wanted to keep the Pokemon Trainer moniker or go for what I've prefer and simply refer to them as Red and Blue.