Minecraft IS a good game, but nobody gives a **** about Steve or actively wants him in Smash because he's not a character.
Let's not kid ourselves; if you want interesting or well-developed characters only in Smash, Bayonetta and Lucina would be the poster children and everyone from Mario to Duck Hunt Dog to Isaac would be in the trash bin. Being a "character" (or having animations or an obvious moveset) is not a prerequisite or even a boon for being in Smash Bros, re: Mr. Game and Watch and Wii Fit Trainer...
I don't think we can overstate the cultural impact of Minecraft. It's the Legos of the 2010's. It's the same thing kids today grow up on, enjoy and love that gives fond memories, one of the games that get you through childhood and adolescence loving video games. That's what Pac-Man, Tetris and Super Mario Bros were to my parents, what Sonic the Hedgehog, Pokemon, and Golden Sun were to me. Minecraft, by any sales or influence metric, deserves to be represented prominently in gaming's history.
If I were to guess as to why there's such a negative blowback for Steve, it's because of that generational gap. While everyone has probably played it, including my 30 year-old butt, Minecraft was that formative experience for the
next generation. It was, and is, a young kids game, someone who is 15-19 now would probably have great memories about it. In my mind, I learned how fun video games could be from Golden Sun or Majora's Mask, but I'm old. And there's some kind of perceived superiority with people of a certain age or maturity because they want to feel more advanced or experienced or older to be cooler. And Minecraft's the opposite of that, right? I think it's more mature to realize what this game means for others.
It may not be your fondest game, but it's absolutely a great one. It's undeniably a popular one. And I can promise you it is the fondest, formative memories for so, so many young people across the world -- people who could possibly enjoy Smash Bros too. That is, if their personal history and experiences with video games were acknowledged and represented.
I've spent years trying to figure out what Sakurai meant by "have you ever made a game," but I think it's things like this.
Also, if Steve were in the game, it would all but guarantee the inclusion of Banjo and Kazooie too.