I think the answers to those questions are pretty ingrained into this thread. Just a couple of nitpicks, though, When you say it devalues competitive play, I think you mean that it deflates hype, which is a very different concept because competitive play is about the integrity of the meta-game, not excitement about specific matches.
Also, the last sentence seems more setting up of a strawman than a counter-argument. In fact, the whole tone seems to have that feel to it.
I think there are some counter points with varying degrees of validity that people make in general and that is:
- It's too hard to set up.
- There's not enough people who play it.
- Don't mess with Melee, I like it how it is. [This isn't a very strong argument, but it comes up often enough I feel I need to list it]
- Melee's too strong, people aren't going to want to play a mod because the focus is too strong on Melee. [Again, not particularly strong, but is another sentiment that comes up]
- There are 8 valid characters in the metagame and that's more than enough to make a game competitively viable [which is true]. If you add more to it, it just increases what people need to know. The current metagame is really deeply refined and engaging. This level of smash is possible because there's a focus on the top 8 [true only pretty recently] that allows people to progress much faster than they could if they had to deal with a lot more characters. If you increase the viable pool, that'll result in poorer play and less hype due to less focus. [The hype argument is tenuous, especially if you remember the smash scene for longer than 3 years ago]
- SDR and PM have similarities, and it's redundant to make another mod. [Again, not particularly strong, but it's another common sentiment]
Feel free to add any more, but those are the main ones I see.