My problem that keeps coming up in my head with Minecraft content and more so Steve is that every single character in Smash has been, just that, a character. Every single franchise represented in Smash has been from character driven games.
Pikmin, Mario, Sonic, Metal Gear, Yoshi, DK, Castlevania, Metroid, Fire Emblem, Splatoon even Duck Hunt and Game & Watch, and so on are all games driven by it's characters, the one exception is maybe ROB and that mother ****** is an exception to a LOT. Minecraft is not a character driven series. Steve is not really a "character" in the sense of the rest of Smash's representation. Steve is moreso an idea than anything else. There is no motive, there is no rhyme or reason to what you're doing in Minecraft thus the charm and characterization of that game falls on the shoulders of the world, the enemies, and animals that inhabit it.
In a sense Minecraft lines up in the way that Tetris, Sim City, Hanenbow, or Nintendogs would. Where the charm is in the surroundings, the stage of you will. Now you might say "why would they go after Minecraft content if they weren't going for a character?" Well that's not easily explained unless you take into account that maybe that's all Sakurai thought the series warranted, or that maybe Sakurai was approached by Mojang, or least likely went for Banjo and for Minecraft content alongside or in its stead after plans fell through. There are infinite possibilities.
I don't necessarily think that Steve is unlikely, but I think it is good to be open to the idea that just because Minecraft sells really well doesn't mean it has to be represented by a character. A stage, maybe even a creeper assist trophy, could work just as well.
Food for thought.