Okay so question:
Is there really a need for there to be so many sets?
I have been a big supporter of customs since day 1, but now I feel that the over abundance of 'viable' sets may be hindering the acceptance of customs. Why not just 1 (or 2) set(s) that are voted on by the community? We could even revote every other month to see if feelings have changed. Sure, a lot of people each want to have there own 'set' be included, but let's be realistic here. Simple is always best and having fewer tends to get accepted (just look at the stage legality issue). Additionally, look at the facts; some characters do better with default, some characters will always run certain customs, and some characters who have good customs won't run the customs because the default is just as good.
Examples include: Captain Falcon and Meta Knight will pretty much always run default. You can play with their customs, but the default is just better. Kirby is always going to run upper cutter and jumping inhale, palutena is always going to run lightweight and probably super speed and jump glide, ganondorf is always going to run wizard's drop kick and dark fists, and wii fit trainer is always going to run jumbo hoop. These moves are just plain better and in some cases what can make a character go from arguably unviable to arguably viable. Sheik on the other hand has solid customs like gravity grenade and paralyzing needles, but she'll still probably run default. Paralyzing needles don't do as much shield damage anymore and are hard to justify over regular needles as regular needles are pretty much considered one of the best projectiles in the game, and while gravity grenade is almost completely better in every way than standard, no one uses side special to begin with and using gravity grenade won't really change that.
I'm all for customs in the meta, but in all honesty do we need so many sets? Minus a small handful of characters, would we really need more than just a default set and 1 custom set? Honestly, the big argument for customs says that less viable characters improve right? Well 1 custom set is all that would be needed to improve them in pretty much all cases. Additional sets would only serve to flesh out specific MUs or cater to a minority's preferences. I know many make the argument for countering an opponent by changing a move, but isn't that a bit much? Like I said before less tends to be accepted more often than more. 1 default and 1 custom just sounds more plausible and to be honest, would balance out the meta more than all the other sets we have listed.
Thoughts?
Simply put, because on top of the general inability for most players to agree to such an extent, there are plenty of characters who have valid reasons to fill their list. That's not always the case, obviously. But even in your example list, I'd never run a default Captain Falcon because I don't see a case in which Falcon Punch will help me more than Falcon Dash Punch.
Also, Wii Fit's Jumbo Hoops are great, but far from a pure upgrade. The vertical recovery penalty is noticeable and significant in certain matchups.
You mention Kirby and Palutena, but you don't mention their other choices. Kirby will most likely run Upper Cutter and/or Jumping Inhale, but what about the players who also want a different hammer, or who prefer
either Jumping Inhale or Upper Cutter but not both? What about the Palutena players who might swap their neutral B, and the oddballs who may want Reflect for the neutral game against Sheik? Ganondorf's running Dark Fists almost without question, and Dropkick most of the time, but there's no set "best" for Side B. Gravity Grenade's a strong tool, but not only is the entire side-B underused for Sheik, default has its uses which Gravity doesn't cover (namely the windbox and related offstage utility, plus kill power of its own accord).
I'm all for paring down sets that are extraneous, for those characters for whom it really is extraneous. But I don't think forcing all characters to 1-2 sets arbitrarily is the way to do it. If Marths think we only need 3123, 1123, 1113, 1121, 3113, and 3121, then we don't need the other four sets filled. If Sheik will only realistically (or even unrealistically) swap between grenades or possibly needles (Doubles should be considered, too), then by all means, simplify her sets to the likely combinations thereof.
But if Shulks want all ten slots, there's no reason to limit them to fewer when there are absolutely good reasons to use any of the ten. If Kirby and Ike players have reason to pick all of their various choices, then there's no reason to limit them to less than the ten slots available.
There's a difference between trimming the fat for healthy efficiency, and being anorexic in an attempt to appeal to a crowd that's opposed by nature. I've not seen evidence suggesting that many players who are opposed to customs would suddenly accept them if they only had to bother with a set or two. It limits the point of the options, and the project, for what many see as negligible potential gain.