What you said is completely invalid because
A: Skull Kid WEARS Majora's Mask, meaning that Majora's Mask would be present meaning the "Big villian" would be. Also, Skull Kid WITH the mask is the more popular character than the actual Mask alone regardless of who the final boss is.
and
B: After the mask is defeated the evil has QUOTE: "Left the mask after all."However there was never any confirmation nor hinting that you could not USE it. Also we are now bringing 'Canon' into the subject. Doesn't this mean that we can't have 2 Link present at once, Ridley will be as big as he ever was, Marth is dead, R.O.B. is a malfunctioning piece of S***, Sheriff can only shoot in 8 directions, Link, Ness, Olimar, Villager, and Ike cannot jump, Fox doesn't have a reflector sheild, Pikachui can't use Skull Bash, and Pit can't fly unless Palutena is present in the battle.
There's a difference between including characters from different generations (FE and Zelda), selectively choosing size (Ridley as they did with Bowser), bringing retro character to the modern era (ROB and sheriff), giving a character mechanics that their genre doesn't include (jumping), presenting barrel rolls in a ground setting (reflector), giving a character one move or two moves from their games in which other similar characters use (Pokemon and Earthbound) and presenting a character completely contrary to the nature of their personality and their overall story in their game. And you have Pit thing wrong, Palutena gives him limited flight and is watching him the whole battle (hence his final smash). Presenting the Skull Kid as a villain completely undercuts the story of the game, along with giving him the puppeteers moves.
Spoilers ahead, because you should really play this game.
Skull Kid was lonely because he had found friends in the four giants, but they left him in order to perform their roles in Termina. So Majora's Mask preys on this vulnerable kid and takes over his body. It influences his decisions and causes him to set the moon to destroy Termina in 3 days. In his destructive nature, he mistreats one of his other friends, Tael the fairy, and fails to take care of Tatl, another fairy. Link finds the Skull Kid and in shorts learns of his plot and tries to stop him with the help of Tatl. Tatl always tells Link he didnt used to be like this, and knows that the mask is manipulating him.
Link spends the game gaining strength, weapons, but most importantly masks. When Link is finally ready to stop him (with the help of four giants stopping the moon), Majora's Mask tries to kill skull kid. And it calls the Skull Kid a worthless puppet and garbage. It was his lack of will that made him a target. Tael remarks he wishes he was strong enough to see what was happening his friend. Link is summoned into the moon and encounters a bunch of kids wearing the masks hes collected. They all want someone to play with. And in the middle, is a kid sitting down wearing Majora's Mask. After you play with all the rest of the kids, you can play with Majora's Mask kid. Good guys vs bad guys. And he gives you the fierce deity mask, which contains the same evil powers as Majora's. But Link can control it, because his trials and friendship with Tatl and those in the game have made him stronger. And after epic battle with the three forms of Majora's Mask (Mask, Incarnation,and Wrath), Link defeats it and destroys the moon.
The Skull Kid learns that the four giants hadnt forgot about him, but he must let them go. and he learns that link risked everything to save him. he asks link to be his friend. They becomes friends, even as he and link parts ways. Skull Kid doesn't put on a new mask, or even the mask link gave him in OOT. Masks can bring great happiness, but true strength comes from yourself. The most important part of a mask isnt the design, or its power, but who wears it. The Skull Kid is now strong enough to live without masks, but with friends, even if they are far apart.
End Spoilers
So I'm not being a tied to canon in a sense to restrict characters or moves. I don't mind a little creative license and originality. But if a character is going to represent his game, he better represent his whole story and the game whole story. And a skull kid being presented as a villain of the story, isnt the whole story. Even if you call him Majora's Mask or present him as a puppet. Giving him moves of his puppeteer is also a bit off. Because the game deserves better than a poor representation of the story's nuances, final villain, and lessons. Just because it would be cool to have the moon as a final smash.
Of course, this being speculation, I could be wrong, and Skull Kid could still be in the game. But he's not likely. He's not the villain. And I would not prefer it.