Maybe the actual issue is that he's a walking joke that doesn't quite fit in anywhere. Hell, the only reason he exists at all is because they wanted Wario to have a tennis doubles partner. Even some Mario fans think he's completely superfluous (a problem that Daisy also faces).
That said, after a quick search, I came upon a reddit comment that's the closest we'll get to an answer:
https://www.reddit.com/r/nintendo/comments/3y2fc1/will_camelot_ever_give_up_the_rights_to_waluigi/
So as it stands, when it comes to Smash Waluigi is like Wacky Races' D. Dastardly, only in this case it's like if Dastardly got barred from the races and Muttley was allowed to participate over him.
Or perhaps he's the only character who didn't do anything noteworthy (being a main character/villain or recognizable enemy/boss) and maybe that's why he's ignored, I dunno.
In the end, it's gotta be some obscure cultural reason that makes sense over there and nowhere else.