Only issue I ever had with Smash Flash 1's roster was the overabundance of Sonic characters. Like, maybe up to 3 might've been okay, but even ignoring the OC's, it got really huge. The anime characters at least came from various franchises so it was spread out way better.
Though keep in mind this was way before the idea of having any 3rd party franchise in Smash having more than one character was unheard of. Even then, I'd still say 5 or more is way too much for a 3rd party franchise. I'd cap it probably at 3 realistically. They're still guests. Luckily the second Smash Flash had a more balanced roster too~ I also stopped minding the OC's a bit more at this point, especially since Giga Bowser is basically one in Smash(and partially playable, much like Master Hand, another OC).
Otherwise, the controls left a lot to be desired, but it was hardly unplayable, really, heh. I've seen worse.
As for other works, I frankly don't care if they get in cause of what company they belong to. Either the character is interesting to me or they're not. Where they come from doesn't bother me. Not that there's anything wrong with being bothered by it either, of course. Though I doubt that'll mean much in terms of what character they choose. If they can license 'em easily, and Sakurai(or whoever may be in charge later on) can make a moveset, that's ultimately what matters. Business obviously will play some role, but part of it depends a lot of factors. Nintendo is already teaming up currently with lots of companies doing dubious or outright heinous stuff. ...Nintendo's not clean either, but most companies aren't. In the end, I'm just there for the fun and games.