I repeat: Why would SE want Geno in over someone they actually care about?

You say that as if Sakurai cares about Geno HALF as much as you guys do. He mentioned him and he "expressed interest", I don't see him starting a Geno fan-club, so why in the world would he refuse to give SE any representation if Geno didn't get in?
1. It says that Geno is the property of Square Enix. That's a bunch of legal crap waiting to happen if it actually belongs to multiple parties. If I own part of a Wii with someone else, it is both of our property. If Nintendo was going to specifically mention Geno and say who he belongs to and they also owned a part of him, they would specify. And on top of that, they do not have "free reign" over Geno as long as they give SE credit for him, if it's the property of Square Enix, then any inclusion of Geno must include SE's permission. That, or a law suit.
2. Sakurai gives a WEE bit more respect to developers than you suggest, since you seem to be suggesting that Sakurai has this "my way or the highway" attitude going on.
3. On a Nintendo web site. Which has a Nintendo fan base on it, not a Square Enix one. Why would people choose Slime, Moogle, or Crono over a Mario-oriented Geno on a Nintendo web site?