Go with the long version. I'm not doing anything at the moment, so hit me up with a nice speech.
4-Player Free For All with items on.
Let's see where the problems lie in balancing a game with this setting. The big thing is randomness. Thing is, this randomness comes in a handful of ways, each one being different.
FFA has it where four players duke it out for the last man standing. The problem with this is how players can go about winning. One tactic would be to let everyone else beat each other up and steal the kills or wait until one remains standing and finish them off. As such, certain characters may be over or underpowered because of this waiting tactic. Another problem with FFA is that you run into the issue of players likely ganging up on someone else and obviously a 2v1 matchup without the proper scaling isn't going to fare well for the solo act.
The other issue is items. As we saw in Brawl, we saw that every item was either OP or UP. As such, you had items that undermined a myriad of tactics because they were so much better than all the other options that the character can naturally do. Items also spawn at specific spots at certain periods, but the item and the spawn point cannot be consistently predicted.
What needs to be done is to balance the characters up on a matchup basis without stage hazards or items involved. This allows the developers to play the characters at the highest level (theoretically) and pit them against one another to find the strengths and weaknesses of each character and make changes accordingly based on consistencies or the lack thereof. The reason why you want to balance at the highest level is because low level players aren't usually aware of the advanced options and techniques available to characters once you dig enough. I think we can all agree that Ike and Pit are not OP in high level play.
The key thing is that balancing requires consistency and that the only randomness that should occur is the natural serendipity of human beings. Without statistics to go off of, how can you balance a character?