I have to disagree with you. I'm not a Toon Link fanboy by any means, but I have to say that Toon Link and the "real" Link have sort of evolved into two separate identities through their own titles. "Toon" Link has been the main protagonist of games that have a different feel than the OoT, MM, and TP games. His games are simpler, usually more original in terms of total gameplay, and have a more comical, naive storyline. "Real" Link represents the aforementioned titles since the franchise's bout into 3D, and he is the more realistic, somber version. He's more about business, about really saving the world from danger, while Toon Link appeals more to the little ones. The fact that they've had their own games created at the same time and Toon Link has his own storyline that separates itself completely from "real" Link's rather redundant one (WW the old Hyrule was submerged, PH continues that same storyline, never played Minish Cap, however) makes them, in my mind, two separate identities completely. Think Mario and Paper Mario.
Still, in regards to SSBB, I've come to realize that "clones" are hated on too much. They may have movesets that LOOK the same, but the characters themselves play compeltely differently. Using Link then moving to Toon Link will, in fact, be difficult. Link is slower but has greater range and power. Toon Link is agile and better in aerial combat, but has less range and less power behind his attacks. The similar moves makes it easier to at least know what you're doing, thus shortening the learning curve, but "mastering" each character is still as difficult as using two completely different characters.
Now, remember this: SSB was made so that fans could pit their favorite Nintendo characters against one another. Thus, it is a fan-first game. Not only that, but it is a Japan fan first game. This explains why Wolf got in instead of Krystal (fan appeal over new moveset potential), Toon Link got in over Majora's Mask Link with changeable forms (Toon Link continues to have games, MM was a one-hit wonder), and Metroid and Donkey Kong didn't get their respective baddies, Ridley and K. Rool (if I'm not mistaken, DK and Metroid are more popular in NA than in Japan). Also, Toon Link represents a whole different wave of Zelda games, whereas Midna + Wolf Link continues the TP lineup, which already has 3 characters, since Ganondorf, Link, and Zelda are all modeled after their TP counterparts- hell, even Sheik's been TP-ized, and she wasn't even in the game!
My point is, whether you like him or not, Toon Link DOES in fact represent a whole 'nother Zelda franchise than "real" Link does. Each have their own line of games now, since it appears that Toon Link continues to get his own handheld games, and "real" Link is just waiting for his next heavily funded blockbuster game that comes out once or twice a decade (rumors of the next Wii Zelda game already being in production were in Game Informer last year, did those rumors hold true?). Toon Link =/= Link, and adding either MM Link or Midna + Wolf Link would cheat a very successful different part of the franchise- whether you like the games or not, they've sold. A lot. More than the Metroid Prime games, in fact. Toon Link deserved a spot, and he got it. Whether he should have kept Link's moveset or not is up for debate, but what we've got is what we've got.
Finally, against the "alternate costume" argument... No one really understands the concept of an alternate costume, it seems. The alternate costumes are just different colors painted on a character model- a very complex one at that. Look at the detail incorporated into each character: their hair moves when they jump, or hat, or even clothing. Their eyes clench when they get hit. Each and every move has a specific range that matches their exact model. If you add or subtract so much as a hat, everything will look different; that's why Wario's overalls model got a whole separate form. Not a new character, since his moves would have the same range and his model would match accordingly, but his biker helmet straps and jean jacket, etc., had to be accounted for. Overalls Wario has different specifics with his movement. BUT Toon Link is a completely different size than Link, and using him at Link's speed and weight wouldn't feel right anyway. Toon Link had to have his own character, and even if he shared a slot with Link, he would take up the same amount of data on the disc because he is, in fact, so much different. But since his moves were based off of Link's, this saved time for the game's makers and got it released sooner. Any complaints about that?
Sorry for the wall of text, but no one seems to look at character inclusions objectively. No matter who you personally want, there are a LOT of technicalities that go into making a character, plus a lot of business reasons why so-and-so gets in and so-and-so doesn't. As for characters like G&W, R.O.B., and even Ice Climbers and Pit, they're for both nostalgia and Sakurai's choice. Plus, their inclusion can produce more Nintendo exclusive games, thus bringing in more money for the company from home-brewed characters of the past- case in point, there's a Kid Icarus Wii game in development now.