My problem with Captain Toad is it's a PLATFORMING fighter--what distinguishes Smash from many other fighters is how it takes it's cues from the platforming games its traditional characters originated in. It seems like in order to stay true to the character of Captain Toad, like his games, you'd have to design the stages to facilitate his play style, which is backwards.
Yes, of course you could design a moveset without him jumping--any character, no matter how stupid, can be made to have a moveset (Steve, for instance
). The wacky characters where Sakurai would have to take major artistic liberties, like Duck Hunt, tend to be because they're special characters. The question is, would Sakurai value a popular character without a natural moveset, or a less popular character with a more viable moveset? Ideally, he'd pick characters with both, but it would likely lean the latter. I personally don't like the idea of putting in a character for the sake of the character alone (and I feel the same way about Bandana Dee, Skull Kid, Geno, but they all have way more potential still).
All that having been said--I wouldn't be salty if Sakurai put Captain Toad in. I'd just think of it as highly unlikely. And personally, I'd rather have a Toad/Toadette combo to Captain Toad--way more interesting possibilities.