I decdided to make a point/counterpoint list for Toad. Most of these were said earlier in the thread, but most ppl haven't been reading the whole thing. (Points are against Toad, Counter points are for Toad [what I think]
Point: Toad is a generic character.
Counter Point: There is one Toad that is believed to be THE Toad (SMB2, Mario Kart, etc.)
Point: Toad is Peach's B-move.
CP: That can easily be replaced by Toadsworth or Perry, Peach's umbrella.
Point: Toad is a filler character and has no big roles.
CP: Toad was playable in SMB2, had a huge part in Mario Party, and was the main character for Wario's Woods.
Point: Geno is more deserving.
CP: Geno had only one big role in one game, and he may be 3rd party.
Point: But Geno was in SuperStar Saga.
CP: Toad was PLAYABLE in SuperStar Saga.
Point: There are too many Mario characters.
CP: The Mario series is the flagship series for Nintendo. Plus, Wario, DK, and maybe even Yoshi don't count as a Mario character.
Point: Why Toad? Why not Waluigi, Daisy, or Birdo?
CP: Toad was part of the 'big 8' and is the only character from Mario Kart 64 not to be in Smash yet.
Point: Toad isn't a fighter! He is a weakling!
CP: Toad was the strongest character in SMB2 out of Mario, Luigi, Peach, and Toad. In the game, he killed shy guys and other creatures.
Point: Just because he killed shy guys doesn't mean that he is a fighter.
CP: Other characters have not had a fighting backround before Smash either.
Point: Toad wouldn't have an original moveset.
CP: An example B moveset: B natural: Throw star. B left/right: Bazooka. B down: (Peach's move with shyguys and other things.) B up: Suprise from SMB3
Point: Toad is way too small and light.
CP: It's called resizing. And, in Mario Kart 64, Yosh in Toad were in the same weight class. Yoshi is not the heaviest in Smash.
Point: Toad has an annoying voice.
CP: Use it to taunt your enemies.
Point: Why can't he be the tutorial guide?
CP: Toad fans want more than that. Toad deserves better than that..
Point: Toad sux.
CP: If you don't like him, don't play as him.
That sums up most things.