It's very much a personal thing but I don't think I'd ever be able to look at a Blizzard character in Smash and not immediately start thinking of the vile **** that was allowed to go on over there.
Obviously that's going to be different for everyone. I'm sure plenty of people can look past it especially if they have an emotional attachment to the character, and that's more than fine! I just know that for me, it'd honestly be a little hard to stomach. I understand that the individuals that created those characters and IPs aren't necessarily going to be the same people that were perpetuating such behavior, but that gut reaction, that stench, it's hard to shake it off.
Again, if you can look past it, more power to you. I just know that it's something I struggle with.