Falco and Toon Link get replaced for being clones in favor of allowing more original faces. 3 Starfox characters strikes me as overkill with how relevant SF is now, and how poorly 3 "cloney" characters were received back in Brawl. If we're gonna cut a SF character Falco's the most logical choice. Toon Link gets cut because he's an identical clone and the effort to make him different is better placed in making Link a better character, he gets no replacement because there's no reasonable one to take his spot like with Doc Mario back in Melee.
1. I don't think Sakurai cares about how relevant a franchise is.
2. Clones gradually get decloned.
3. Re-adding Falco and Toon Link is a lot easier than making a character from scratch. According to Microsoft, it costs 4 times as much to add a new client than keep an old client. That same principle can be used in something artistic like creating video games. Also, Falco is only a few moves away from being totally original.
In regards to cuts with the clones, we saw it happen from Melee to Brawl, I think it's fair to expect it in Smash 4, and I would prefer cuts for a variety of reasons.
But one of the 4 cut characters was original. Also, all the returning Melee clones became more original. Lucas has literally 3 moves that Ness has. And like I said, creating something from scratch is harder, more expensive, and more time consuming than merely fixing something up.
The "thing" next to Lucario is a rather comical placeholder for the Gen6 Pokemon. Habanero said it could end up being an armless imp and thus unfeasible, so that's what I used for the image.
Mewtwo gets cut for reasons said previously, Having Pokemon take up nearly 20% of the roster with with 8 characters and 6 slots is excessive imo, that's why I feel he may not come back, same with Roy. They might be DLC though.
Sakurai doesn't care about percentages of the roster, but the quality of the characters. Also, Mewtwo is the most wanted character not in Brawl. He's wanted more than newcomers. Sales will suffer if Sakurai doesn't re-add him.
Diddy+Dixie is mostly something I want to happen, since DKC2 is my fave in the series and the Puppeteer/Tagteam concept is always interesting and it'd be nice to have another. I feel that just because it couldn't work once before, doesn't mean he won't attempt it again, also just because Diddy was solo in Brawl doesn't mean he can't get into THIS Smash Bros in a slightly different (perhaps more powerful) way.
This is kinda my opinion with the Lucas/Ness thing: it's kinda like merging Link with Marth. Just because they have swords doesn't make them the same. They both are better separate. Plus, the likelihood of this being broken is extremely high, especially since they can approach you two different ways. The fact that the IC have the same moves is what makes it work so well.
Snake and Sonic are removed for two reasons 1. I want Snake back, so I'm prepping myself for his possible absence.
Even though Kojima and Sakurai are close friends. Sakurai's opinions > ours.
2. Both are guests, and we have yet to see Guests return in any other fighter ever, so there is a possibility they may not return simply due to that pretense.
Smash Bros. isn't just a fighting game, unlike BlazBlue, SF, Tekken, SC, etc. It is Smash Bros. It's part party game, part shooter, and it is totally character-driven. Also, Sakurai has stated that he felt Snake and Sonic were "incredible" additions to the roster, and added a lot of uniqueness to the roster.
Simon replaces Snake because not only is he the only dude bad enough to take his spot, but Kojima is apparently working on the Castlevania franchise so he makes a reasonable replacement.
But Kojima is also working on new Metal Gear games. Snake (whether Solid Snake or Big Boss) is in every Metal Gear game (save Rising), whereas Simon hasn't been in too many Castlevania games recently.
Anyway, in regard to what you were saying about hitboxes, what is it that's so tough for Smash when compared to other fighters like BlazBlue, who constantly revamp old characters while adding new faces, or SF and MvC which do the same and also make a lot of cuts. Is this the reason we don't normally see the much desire moveset revamps on current characters, or is Sakurai just lazy?
Well here's the thing: Smash Bros is character driven. SF, MvC, BB, they could all basically have playable walking turds clones of Ryu (or as I call it, SF, especially SF Alpha), and you wouldn't notice. If you replaced Mario, Link, and Pikachu with freaking 20 different generic Ryu clones like SF does with their characters, sales would drop significantly. No one wants to play as original created characters in Smash.
And Sakurai isn't lazy, especially when compared to Crap-con. He worked 20 hours a day, 6 days a week on Melee.
Also, unlike SF-related games, Smash comes out every 5 years; you get a new SF-related game seemingly ever year, with multiple re-releases for each game (because Crap-com is too cheap to give you the full game). Also, replacing, re-adding, and replacing characters in games like SF is done for marketing's sake, and to keep the roster "fresh". If they wanted to give you the full game, they'd just fix up the old characters from previous games, and add them in, too. If you release a game every year, people get bored of the same roster. If you release a game every 5 years, you don't have that issue.
It's not being lazy; it's being efficient, and maximizing the value, size, and diversity of the roster. On top of that, unlike a lot of SF games, the physics and gameplay (the basics aside) are totally different in each smash bros. games. Smash 64, Melee, and Brawl are all completely different, to the point where each of them have different engines and way different game speed and gravity. You turn on most SF games, including any Vs. game, and they have the same engines, about the same gameplay, and they "feel" the exact same. It's almost Madden-esk, in a sense, especially with the multiple versions of games like SFII, III, IV, and now even MvC3.
tl;dr: Capcom treats fighting games like it's a regular season MLB game, Sakurai treats Smash Bros. like its' the Super Bowl.