Here's what I think and some true facts on this issue.
For the first SIX MONTHS of Melee tournaments, items were on. For SIX WHOLE MONTHS. Some tournaments still offer items to this day. What I'm trying to point out here is that items will be on for the first little while. This is so that the competitive players can decide whether items should be allowed in tournaments in the future. The main reason why items were banned in SSBM was because of the exploding crates, barrels, and capsules. Sakurai has gotten rid of the random death boxes buy putting logo's on them. Now you can tell which boxes explode and which slide. Now those are just the facts. Items will be in Brawl tournaments for the first little while, and then they may be banned, and they may not.
Now, in this arguement, I stand on the FOR side. I think Smash Balls deserve to be used in tournaments. A final smash is a move unique to each character. This move is just as unique and character specific as a character's B moves. Removing Final Smashes from tournaments would be like banning Fox in melee tournaments. Just because final smashes SEEM unbalanced, doesn't mean they should be banned. In SSBM, Fox is massively unbalanced, but is he banned?
Obtaining the smash ball is a different issue, mind you. Sure some characters will be able to break it open faster than others, but that's a given! Some characters run faster than others, some characters moves come out faster than others. We might as well ban the entire game! Different characters will have different pro's and con's. Some characters might be good at breaking open the smash balls, some characters might suck ALOT at it. Either way, different characters house different attributes which is what makes this game so diverse.
Now comes the debate of some final smashes being better than others. Is Falco's neutral B better than Peach's? Indeed it is. Are we going to ban Falco from Melee tournaments? Of course some Final Smashes will be better than others. Making a game perfectly balanced makes it extremely boring. The diversity of Smash is why people love it so much. Secondly, the Final Smashes aren't all one hit KO's. They only kill at certain percents, and alot of the ones we've seen are easily avoidable. To set off most of these final smashes, you either have to be playing somebody REALLY stupid, or be combo-ing. Being able to grab the Smash Ball and use it effectively will take planning, precision, and intelligence. It's not just an automatic +1 like people tend to think it is.
Then we have the Pity Final Smash. What's the big deal with this? If you're destroying someone that badly, you should EASILY be able to knock the Final Smash out of them or avoid it. If they're so bad to the point where they get the pity final smash, you shouldn't have a problem. Sure they get an awesome move to use against you for free, but if you're so amazing that they get the pity smash, why can't you prevent it or turn it around on them? Most people are scared at the thought of a free final smash, but you only get one if you suck, and if you suck enough to get one, I'd like to see you use it effectively.
For a compromise, I offer this idea. At SSBM tournaments, before a match each player picks a default stage and bans it. Then the loser of the round gets to pick a stage (neutral or counter). Now we have two options. Before a match, the players can agree whether to have final smashes on or off. If you can't agree because you're both stubborn, then there's a second solution: the loser of the round can choose to have final smashes on AND pick a stage, or can choose the stage/finalsmash and the other player will get to decide whatever the loser player doesn't pick.
For example: You beat me. For the next round, I decide to play with Final Smashes on, but instead of me picking the stage, YOU get to pick. This works vice-versa as well.
Really, after sitting down and thinking about it, Final Smashes don't seem so bad. Call them broken, call them unfair, but that's just your opinion. I myself think Fox and Marth are broken and unfair, but before declaring them BANNED, I look at the pro's and the con's. I've played with Fox and Marth, and they're tons of fun, so I gave them a second chance. Atleast give final smashes a FIRST chance.