While I agree with the OP that the game needs to change, I disagree with many of his arguements.
"Video games thrive on new players joining the fray constantly. If the game is slightly tweaked to remove Wavedashing, a glitch that shouldn't exist (even if the programmers noticed it and left it in, it doesn't mean they saw the full ramifications of leaving it there), then fine, so be it. I can't Wavedash around my group of friends because none of them can do it; they don't bother to practice it, and refuse to play against me if I actively use it, and as such, I find no need to practice it either. So Wavedashing gets removed? Good. Explain to me why it should be left it."
Did you know that in Street Fighter 2 'cancelling' attacks was a glitch? How about how juggling was an unintentional mechanic in many fighting games before it became an established strategy in games like Tekken and Capcom fighters? Mechanics of the game may be unintentional, but when they work, companies don't need to completely eliminate them, they need to embrace them, inform all players (like in the manual or a training mission or something) balance them, and re-release them. The shield parry was an unintentional mechanic of Yoshi in the original, and the improved power-shielding system and spot-dodging systems I think may have stemmed from that accidental mechanic. To say that a company should remove a new mechanic just because people can't do it would be like removing comboes back when only a few peoplel could do it, rather than doing the intelligent thing:
Simplifying the system.
"I remember during the initial preparation for this game, that everyone was complaining about Melee turning into "just another fighter". One such argument: If they added Supers into it, that's a bad thing. Well, they sure as heck added Supers to it, didn't they? And they did a fine job at it too, by making it 'optional' for all you 'pros' who don't like fighting with items and only play on certain levels. This is where your hypocrisy comes in: If you don't want this game to be just like any other fighter, why are you trying so hard to make it like one? You remove items. Why? Because they take away from the skill required to play? No, you take them out because they're "random" and it makes the game "unfair". Bull. Items make the game more frantic, and add the chaos factor that regular fighters don't have. You play only on a small selection of levels, and you ALWAYS get rid of the moving levels, such as Poke Floats. Why? Because they're "random" and it's makes the game "unfair". Bull. The moving levels make the game more fun by making the players have to concentrate on more than just their opponent, something that regular fighters don't have.
By cutting certain levels and removing items, you completely destroy certain characters' only good qualities. You can bet that Mewtwo would be a better character if items were allowed, because the moment he picked up a Paper Fan his opponent would be afraid to put up his shield. Pichu is Bottom Tier because you removed the only thing that gave him an advantage: items. Because PokeFloats and Big Blue are turned off, it's impossible for, say, Kirby to gain an advantage by using the environment as a weapon. By turning off the "unfair" levels and items, you make this game exactly like all the other fighters out there, only lo and behold, you have to do your own combos. But in removing levels and items, you also remove several combo opportunities."
Sigh (rserved for edit, I gotta finish this later).