Top tiers are not untouchable gods that low tiers are virtually incapable of beating. But that IS what it's like playing a fast character who is stalling on KJ. A Ness player can legitimately fight, mindgame, and defeat a Fox on all the legal stages, but on KJ he can't even contest Fox's victory. If you can't see the difference between the two, then it seems we'll never agree.
I don't want to argue for Hylian, but I felt the need to interject here: you're clearly just arbitrarily balancing the game when you make arguments like this. Ness can never contest Sheik's victory on any of the stages, save for maybe by exercising an esoteric strategy on a counterpick stage. Should we ban Sheik?
Individual characters do not determine balance in a large enough degree to warrant bans. It's too bad that Ness can't beat Fox
at all on certain stages, but that is not an inherently bad thing. It's just a character weakness. On the other hand, if there were only 4 viable characters against Fox on Kongo Jungle, you'd have a point, and the only thing we could do from there is argue on the number (i.e., the cutoff) of characters who should be viable on any given stage.
If, however, you feel 8 is too few a number, you're inherently contradicting yourself by not banning Sheik. We can go through the numbers and note that, at high level play, the following characters have a chance against Sheik:
1) Fox
2) Falco
3) Jigglypuff
4) Sheik
5) Marth
6) Peach
7) C. Falcon (detestably)
8) Ice Climbers
You can possibly introduce another character or two (depending on what your threshold for viability is), but it should be clear that a high level Sheik will beat any Dr. Mario, Ganondorf, Samus, Pikachu, Mario, Luigi, DK, Link, Y. Link, Zelda, Roy, Mewtwo, Yoshi, Mr. Game & Watch, Ness, Bowser, Kirby and Pichu as often, on every stage, as Fox will beat Ness on KJ.
If you want to get rid of the stage, but not Sheik, either I'm off on the matchups (which I'm willing to admit is possible, though I sincerely doubt), or you're creating a contrived rule along the lines of "stages can't make viable only 8 characters, but characters can."