I see no reason why 4 vs 4 can't be competitive and in tournaments. There was 4 vs 4 last night at KTAR XI and as far as I'm aware, there were no problems. Honestly, I think the issue is that a lot of people have trouble moving on and trying new things such as custom moves and 4 vs 4. Neither have blatantly obvious problems. inb4 i get slammed for this
KTAR XI was actually almost a complete wash as far Smash 4 went. The attendees and stream had very mixed responses.
In the short term, we want to be able to facilitate just being able to setup squads. People are new to it so of course they are going to mess up, so setup time took FOREVER every time people have to move to another system. We also need to either always have a bigger monitor than a typical setup, or two monitors, something we still need to get better at.
In the long term, we are hoping we can even keep Smash 4 a thing three-or-four years down the road. If Smash 4 stagnates, it will result in subsets of gameplay being reduced. At the bare minimum I hope, if this is the case, we can keep doubles going. If we can continue to propel the values of team play in Smash 4, squads can hopefully still be a thing. Players have vague interest in squads, and attendees and viewers are seeming to enjoy Smash 4 doubles or Melee a lot more. Could be because everyone sucks at Smash 4 right now. The general opinion with Smash 4 among the better players is that there is tighter visible skill discrepancy between players as a possible cause.
Aside from setup concerns, there is also the matter of stages. For all the variety in team compositions we can have, we're going to have abysmal stage selection. Temple was a huge flop, for instance, for all the reasons that were to be expected. It's hard enough to keep people actually fighting each other in Smash 4. We're very likely to boil down squads to being limited to BBF and FD.