Apart from everything people has said, I would add Camelot are still interested to do RPGs, when the Camelot bosses said two years ago they wanted to make
a new Shining Force. So, even they're doing Mario sport games those last years, they're asking to do something different.
And, obviously, relevancy doesn't matter in Smash anymore. Some of the new 3rd parties aren't very relevant (FFury, Bayo, Banjo, maybe Persona (it has great sales and a really good fanbase, but I don't think it shaked the JRPG genre...) and some Nintendo franchises with characters aren't (KI, PO, IC...). Nintendo characters have others parameters, they don't need to be iconic or hyper recognizable,
The other two points are subjective for both points of view, and if they don't want Isaac (or any other character), they won't ever listen any of your arguments.