Or, the more logical answer:
A"Square said no"
Like, Geno's problem is that he's always had to fight against Square's juggernauts, and that, despite fan outcry, is an uphill battle.
Another thing I'd like to add to the whole "Geno vs. the World" debate is that in terms of fan demand, only K. Rool and Ridley had enough to be acknowledged for it. Ridley was a character that people requested for
18 years, since before Melee's release when all they had was the cinematic, and K. Rool had so much fan demand that Nintendo was taken by surprise at how much he had. Those two were the juggernauts of Smash Bros. fan requests, with all other characters far below them.
Therein falls Geno. He's popular, sure. He likely had a good ballot presence, but not as much as K. Rool, who was the focal point of the core Smash Bros. fanbase during the Ballot era. He may lack raw fan demand, but Sakurai likes him, so much so that he added Geno as a Mii costume. But the thing is, a Mii Costume is likely the best he's getting.
Sakurai has likely gone to Square Enix and asked for their permission to use Geno. I would say he's done it at least twice. Once for Brawl, and again for Sm4sh DLC. Hell, he likely went to them a third time when deciding the roster for Ultimate,
and each time Square Enix said no. He won't make enough money, and he's an irrelevant character (to Square Enix). The reason they said yes to the Mii costume was likely because it was another way to make money off of Smash Bros. fans without requiring any effort compared to Cloud, who's the main event.
Sakurai goes to them for Cloud? They recognize how much money he'd make, being the poster boy of Final Fantasy and a representation of Square Enix's biggest-middle-finger to Nintendo, and how much publicity they would get through his inclusion, so they give Sakurai permission to use him.
Geno lacks the raw popularity of K. Rool and Ridley, and for a company who seems more interested in the bottom line and promoting their brand than other companies in Smash, who show a bit of good will to Sakurai and Nintendo (Remember: Capcom let Nintendo
****ing murder Megaman in Ridley's reveal trailer).
Why add Geno when they could other characters, such as Sora or Lara Croft who would blow up the internet, or a Dragon Quest character that would cause Japan to miss work and school because it's that iconic of a series over there. If Geno were added, sure they'd get
some coverage on gaming specific websites, and the core Smash fanbase would be pleased, but the wider fanbase would mostly react with confusion because Geno is, I hate to say it, a literal who.
We're in the DLC phase and
****ing Piranha Plant is our first DLC character. Popularity
within the core fanbase has gone straight out the window, especially with conventionally popular fan characters (Isaac, Shadow, Rex & Pyra) being disconfirmed without a second thought. I believe we're going to be seeing widely popular characters for our DLC picks, and Geno just doesn't fall into that category.