Goddamn, this thread moves too quickly.
Now I seen why people like Corph and such get so confused about the current topic at hand...
She is certainly a part of the problem. She definitely brought a lot of horndog furries to the Star Fox fanbase, and her awful characterization was part of the reason why Command was so awful. It would be apt to consider her the Shadow of the Star Fox series.
I think Habanero is right that it will be difficult to work off the "stink" that the character has especially considering how long it has been since the last game. The legacy for the post-64 games has not been kind overall.
Personally, I've never cared too much for Krystal. I never hated her, but I also never liked her. My fave SF character is actually Wolf.
However, I wouldn't label her as "what's wrong with SF." In the two hours I was able to keep my attention on Command, Krystal was the least of my gripes. Command was bad because of the dumb strategic flying BS, and the ridiculously stupid art style. Krystal didn't really bother me so much. In fact, my only problem with Krystal was her AWFUL choice of color scheme. Just further proof that most Japanese "Artists" never bother to learn art at all.
I mean, body suits aren't rocket science, just because you're a girl and a pilot doesn't mean you gotta wear pink, this ain't the goddamn power rangers, a simple purple or blue would have sufficed:
On Adventures, I haven't played it yet, but I like the concept of StarFox being StraTrek-ey, though I've never watched ST outside of that new movie that came out recently...
As for attracting furries. I don't think it was Krystal that was the magnet specifically. Especially considering most of the SF furry-**** is homo Fox X Falco or w/e... Regardless, not wanting the character for that reason alone is a bit un fair. All series and characters will have a ****ty side to the fanbase. The reason we haven't seen much for Palutena yet is because she's still relatively new, but even still there's plenty of stuff for her floating around, mostly /ss/ and the like, but still. Rule 34 after all. Expect it to grow as she becomes more notorious. Does that mean we should kick her out of Smash once that happens? Well, no. I mean, Zamus is still in Smash isn't she?
All that being said:
Basically, Palutena would be more MAGIC staff oriented. Krystal would be more melee oriented with her staff like Kilik.
I could definitely go for this. I'm liking the idea of Krystal in Smash, especially over the likes of Falco. Still, I find her chances are also very slim.