Don't strawman me, sir. I don't want every single franchise to have playable mooks. Only the ones where the enemies have significant iconography. Which would be Mario and Zelda at this point.
They're no better than adding in generic skeletons from Castlevania. Thinking anything else is a delusion. A Goomba is not any more worthy than a skeleton from Castlevania. You don't get to arbitrarily decide they are worthy of being in on the grounds of being more "iconic". Generic mooks are generic mooks.
Fighting game characters change little across entries. That's just how it is. Street Fighter III replaced 90% of the previous game's cast with brand-new characters. It did not go over well, and while people did come around to them eventually, it still noticeably hurt the game's performance. What did they do before then? Mostly just played Ryu & Ken because they were familiar.
Street Fighter 3 didn't do well because they failed to market it properly. Also, using the example of SF3 completely destroys your entire argument. SF3 was a marked evolution from SF2. It featured way more fluid animation, completely different combo mechanics, introduced parrying, EX moves and stackable supers. Smash has not had any sort of significant evolution of this magnitude since 64 to Melee. Despite being a "failure" SF3 still changed the way future Street Fighter games would be built. Building and iterating off SF3 they added Focus Attacks and EX FADC in SF4, and V-Trigger in SF5, And saying that returning characters didn't change change between SF2 to 3, 4 and 5 is ridiculous and shows how little you actually know about the SF games. SF2 Ryu does not play anything like SF5 Ryu. Even SF5 Guile, who could be argued has changed the LEAST between iterations, is vastly different than his previous iterations.
If you're so positive Odyssey changes will make Mario not only different, but better, why am I not hearing explanations or good examples about it? And since you say characters don't have to adapt 1:1 with source, then doesn't that mean it's actually OK for Ganondorf to primarily be a slugger?
You contradict yourself a lot in fact, constantly saying Smash needs to ''evolve'' (not that you've given good ideas on how to do that beyond a small handful of characters), yet bemoan the loss of features in old Smash games. Evolution sometimes takes away unnecessary things, you know.
The fact that you're incapable of understanding my point does not invalidate it. Adapting content from more recent source material is just the simplest example one can give of the way Smash has done nothing to address its stagnation. Personally that's just the tip of the iceberg, I'd much rather overhaul the gameplay from the ground up. I'd add completely new mechanics, such as:
-combo strings with a hit counter,
-enhanced special moves with meter,
-underwater combat in place of the useless surface swimming mechanic,
-tag team modes,
-assist summons ala MVC1,
-interactable stage hazards such as turrets,
-a different function for the Y button (like using it exclusively for light attacks or short hops),
and more things that aren't just off the top of my head. You can evolve the series without taking away the casual fun factor, it just takes a bit of planning, but I know they're not even going to bother, for reasons I'll outline in my next quote.
And loss of additional content like trophies that doesn't affect the gameplay is in no way related to the "evolution" of Smash, this is likewise an utterly silly argument. Trophies are merely unlockable rewards, not a gameplay element in of themselves that affects whether the series stagnates or not. You're very bad at this.
Ultimate is now the best-selling Smash game of all time, and it achieved this by focusing on what draws people to it in the first place: a massive all-star cast distilled in a way that's easy for players of all ages to get into and fight each other. Hard to argue with those numbers. If Smash has to evolve due to being unable match the scale of this entry, so be it, but it won't be because that strategy wasn't working.
And now you understand the crux of the problem. This is the reason why Smash is never going to evolve, because the justification they use for keeping it the same is that its sold well. Something can sell better despite being a worse game - sales are not indicative of quality. Ultimate is not the "ultimate" version of Smash, far from it. It plays worse in many areas and is lacking enjoyable content that was in previous games in the series. But it sold well anyways, so that's the excuse they're going to use to keep it the same. Using your earlier example of SF3, it was a much better game than SF4 and 5 ended up being, yet it sold miserably. SF5 is regarded as the worst in the series by many SF fans, yet it's selling like hotcakes. Truthfully neither you or I can say whether an "improved" version of Smash would sell better or worse, but I personally believe it's in a place where people who like Smash will buy the next game regardless of how it turns out, and I think it could benefit from extending a hand to casual players to help them learn how to get better at the game.
A perfect example of this you'll likely hate is Project M - PM was designed primarily with competitive players in mind but they still kept a lot of things that casuals would enjoy, such as new stages and single player content. A video game bar in my city that usually attracted the most casual drunk players imaginable had Project M setups all over the place and they ate it up anyways. It is possible to keep both audiences without alienating one or the other. I think lots of people outside of Smashboards would like to see the series become more than it already is. I'm far from the only person who thinks we've been playing the same game for the last 18 years. But traditionalists can't really be swayed. The fact that the game sells well is enough of an argument in favor of keeping the series the same, and tragically I understand that mentality. The game is very broke, but it sells well, so they won't fix it. It is an unfortunate reality that the pursuit of money eventually gets in the way of innovation.
Yes, there is a risk involved in evolving Smash. Yes, if they do something risky they might have worse sales with the next game. But they also might have better sales. Both of these scenarios are possible. I guess we'll never know though, because they're never going to take the risk - there's no reason for them to do so. So as I said before, Smash is cursed.