Well, MUGEN is everywhere. It isn't owned by anyone or anything. Any Average Joe can get MUGEN and add characters from other games, or fan sprites.
Crusade isn't as clusterf***ed as MUGEN. It is a fangame with a purpose. Not only that, it is owned. By you, DRMARIOX, and Phantom7. Whereas MUGEN users can't be targeted by copyright issues, if a copyright issue is involved with Crusade, there are targets for the ones with the copyright.
Granted, I don't understand how any fan sprite of an existing character could be copyrighted, let alone by another team for a fangame. They technically didn't make the sprite, a fan did. That's like saying that you guys won't let anyone else use your Bomberman sprites because it's in your game. It doesn't make sense.
Especially considering that the sheet originally said to simply give credit if used. As long as Cheddar-X says it's ok, you should be allowed to use them. But the SSF2 Devs seemed to have brainwashed him into believing that they're strictly for their game...