A couple thoughts:
First and foremost, if the dev team really is planning on working on a stand-alone project, I'M FREAKIN' PSYCHED!!! Different people enjoy the Smash series for different reasons, but the reason I chose to focus on PM over all others is because the focus on the stated goals of the PM (fast, balanced, competitive, favoring offense, rewarding edge-guarding, etc) trumps everything else for me. If this team is really going to develop an easy to pick up, hard to master game with similar mechanics, that can also be a fun party game with casual friends (let's keep that item switch!), it's going to be amazing, even without Nintendo franchise characters. I'll be a supporter from day 1.
The abruptness of this announcement does seem suspicious to me. The fact that the download isn't available on the site is a huge red-flag. They probably got a legal letter from Nintendo threatening them. If the language of that letter implies they aren't even allowed to talk about it though, that's beyond ****ed up. I wish they'd fight it, but I understand it wouldn't be worth the expense, (unless some legal advocacy organization volunteered to take the case pro-bono).
Still, if this letter exists, at the very least, leak it to the press. You guys already stopped distribution of the game, there's no longer any legal harm Nintendo can point to to hold you guys liable. If they go after you for simply making the letter public, despite having taken the game down, they're going to get a sh**storm of bad press.