Reasons that a character should be banned:
1. Breaks standard gameplay. Character does not adhere to the fundamental mechanics that determine how you would play the game with any other given character exempt from this category. This is why Pokemon banned Wobufett, if you're looking for a functional example. In essence, this character "breaks" game play, which is where we get "broken". It is coincidental that breaking game play usually leads to an unbeatable character, but that's not the case. I You could say that Melee Ice Climbers are "broken" because you can only grab one at any given time, but it's such a stretch that no one really cared.
2. Character is unbeatable. Character has no opposition for whatever reason. This is best conveyed by the Akuma example. Metaknight is nowhere near this definition of unbeatable. I don't mean like "I'm a smasher I can't beat MK waaaa!" I mean more like no matter how talented you are, you are simply not going to physically be able to beat this character. It isn't happening, regardless of skill.
Only one category of the above two must be met. I can't think of any examples where both happen anyway.
Reasons that a character should not be banned:
1. Over-centralization. The character is heavily played. I don't really see how this is a relevant argument at all. People will play to win, and you want to punish that by banning the best character? Of course the best character is going to be played the most often in a competitive community that encourages "playing to win" where the most common line at any tournament is "no johns". Even if 80%+ of smashers played MK, punishing the most logical choice for playing to win will kill the game's competitive spirit more than said character will.
2. Lack of counters. Tons of competitive games in every genre have games and characters without counters. Why are we the only community to have problems with it? At least if MK's worst match was 75/25 in his favor, it would be borderline close enough to refer to "unbeatable character" argument in favor of banning him. Metaknight has shown to have several close matches, even if he doesn't have any counters. These characters are debatable, but my list has Snake, DDD, GAW, Diddy, DK, and Pikachu as decently even matches for Metaknight.
Which comes to my next point. What are tournaments really measuring? I have always felt that tournaments measure the best player through a combination of things- consistency, character choice and mastery, metagame and familiarity with current trends. Are we such poor players that we look for a counter rather than choosing a character on equal terms to fight MK? Why don't players look for even characters and try to best the opponent? Shouldn't the better player win anyway? I have seen several people pick up a new character to fight Metaknight, but I've seen many, many more complain that he has no counters and give up.
3. Makes other characters not viable. This is exactly how tiers work. Characters are higher tier because they are expected to win more. If they don't, they fall on the next tier list. This is why a tier list should strive for current accuracy and be updated constantly to retain value. Higher tier characters win because they beat lower tiered characters. This is exactly how a competitive game should function, we should not aim to punish this unless, again, said character falls into the "unbeatable" category. Metaknight does make some characters not viable. They were simply never meant to fight him, and he counters them. This is not because of Metaknight as a character, but rather the observable effect of a higher tiered character beating a lower tiered character.
However, if you're looking for characters that make others not viable, Falco and DDD do a much better job at it than MK can. At least MK, in his extremely one-sided matches, you can outskill him for the most part, player dependent. Some characters cannot ever beat Falco or DDD provided basic character knowledge. No matter how good your DK is, you're going to have serious problems beating a mediocre but basically knowledgeable DDD player.
Reasons that we should not or cannot ban MK:
1. Metaknight is neither unbeatable, nor breaks standard gameplay. Now, assuming his infinite cape stall was not banned, ok, that would offer some debate of some kind. As stalling is banned, this argument no longer exists.
2. We are not the full community. Smashboards can ban a character, and even allisbrawl might follow suit, but we simply don't carry enough weight to move the majority of players. Local tournaments or those not listed on smashboards will probably still have MK as legal regardless of our actions. We might be at the heart of the competitive community, but we don't comprise all of it.
3. It encourages tournament hosts to deviate from our recommended rule-sets. In a community this small, we don't want to divide our community from halves into thirds. Right now we already have a battle between Melee and Brawl tournaments. I really don't want to see Melee vs Brawl vs Brawk minus MK.
4. As long as people are still beating MK with other characters, our arguments against him don't hold any weight. A victory for non-MK nullifies every given reason so far to ban him.
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tl;dr
Reasons to ban a character-
1. Character breaks game play.
2. Character is unbeatable.