I never want to see more than five third-party guests, at least in a roster no bigger than 50. What I like about Smash Bros. is the cohesion that its cast has; they're all made by Nintendo, and that helps the crossover concept be fun while keeping it aesthetically clean. It's a great experience to have your favorite Nintendo characters together; they're all tied to the same entity, making them shared experiences of a single associated memory. Whenever crossovers start incorporating tons of properties from across the board with little to no shared history among them, that sense of an epic clash is lost on me. That's why I can't really get behind things like Project X Zone or even Street Fighter X Tekken and its band of guest characters. Once the pool of properties starts over-extending itself, the crossover devolves from a nostalgia-driven collusion of associated but distinct properties into a messy mishmash of totally unrelated sources. If Smash Bros. took that route, it'd no longer be a celebration of Nintendo; just a fanservice game trying to appeal to as many different fanbases as possible without any sort of self-identity. When I fight Ganondorf as Mr. Game & Watch, I still feel like they fit together because they're both Nintendo characters I associate with one thought. Fighting someone like Bayonetta with Mr. Game & Watch, on the other hand, would make me question why these two characters are even in the same game, and it'd just feel weird. Being a Nintendo crossover is Smash's purpose. It doesn't need to become a generic "video game in general" crossover. If every crossover game did that, there'd be nothing keeping them unique among one another. There are third-party characters I'd like to play as, sure, but for every one of them, I can think of a Nintendo character I'd like just as much, if not more.
I also oppose an inundation of third-parties because I still think Nintendo easily has another 15 or 20 popular, important characters that could be added. I really don't think we're scraping the bottom of the barrel yet.