I think being an icon isn't just longevity. You need to have the star power to be an icon, and the name Piranha Plant just doesn't have that. And I'm not opposing his appearance as he looks really fun to play, but I would not call Piranha Plant an icon because he has been in a lot of games. I mean he is one of the longest running enemies in the franchise along with Goomba and Koopa Troopa and fits into Smash better than those two, but at the end of the day as I said earlier he doesn't have the star power or popularity to be called an icon imo. I mean the Buzzy Beetle was in the first Super Mario Bros and he isn't an icon.
I think that Piranha Plant was chosen by Nintendo and Sakurai only gave the OK, but anyway:
I think that Piranha Plant does something that both Goomba and Koopa fail at: it represents Mario's level design.
Piranha Plant is a static enemy, it's part of the level layout... and I mean, he's not one of those minions who run around the level, he IS PART of the level's structure.
In favor of this, Mario is a series where the platforming and the level design plays an huge role, even more than the characters themselves, and Piranha Plant does an awesome job at representing that.
I felt silly when I looked at the huge moveset potential the plant had and the fact that I never noticed it until the announcement.
Back on my previous statement of Piranha Plant being part of the level: what do you think of when I say you Super Mario Maker? I don't know you, but when I think of Mario Maker, I think of Piranha Plant, it's like the most used enemy/element in the whole game, or at least the most iconic to the game... I've seen entire levels made of Piranha Plants.
Another thing that justifies his presence in Smash, is the fact that a Piranha Plant has been an important character in the Gamecube/GBA/early DS era, and it's Petey Piranha.
One of the reasons why Piranha Plant is in the game, could be the existence of Petey Piranha.
At the time, it was in a lot of spin-off games, it had merchandise based on the character.
Maybe, it wasn't important enough to deserve a spot as a character himself, or maybe Sakurai went with the "too big" excuse once again and prefered to use the smaller version, or maybe Nintendo specifically asked him to add a Mario minion, though I think that Petey Piranha played a big role in Piranha Plant being a newcomer, despite it not being the primary form used ingame.
Also, I think that it's not Petey Piranha because Piranha Plant is a species, and Petey is a specific member of the species. Just like with other characters such as Mario or Link, Sakurai prefers to represent the general design of a character instead of representing the specific desing and moveset from a specific game; that's why Mario has references from several different games in his moveset, Young Link doesn't use masks and doesn't transform into Fierce Deity, and Zelda has the armor move from Spirit Tracks despite never doing it in the games where she appears with that design.
Piranha Plant appeared in countless different versions through the Mario series, including spin-offs, and Petey Piranha is just one of those versions.
So, Petey Piranha is not a different character than Piranha Plant, he's still Piranha Plant, just a different version of it but still a member of the species... Sakurai probably thought that it was better to merge them all into an unique fighter, and Petey still appears in the game as the final smash.
(for a similar reason, I think that the space pirates are unlikely as newcomers because Ridley already represents the species of the space pirates, being one of them).
So I think that's not completely true that Piranha Plant is just a generic enemy, he's the representation of Petey Piranha and his species, a character who's been kinda relevant in the Gamecube-to-DS era (similar to Bowser Jr).
Add this with the fact that the species in general represent the platforming structure of Mario's levels, and that they were an important element in Mario Maker, and you can see that, in a way, Piranha Plant kinda
deserves being in smash.
If you look at Piranha Plant this way, you can also see why it was selected over Waluigi (Waluigi didn't even get a role in a main Mario game, while Piranha Plant did more than once, as Petey Piranha).