Perhaps there can be an optional mode where a dead player can tap in certain areas to drop items or bombs during an ongoing match, slightly affecting the outcome of the match. Of course, it should be very limited to prevent it from being overpowered. It could be akin to bomb on wheels in Mario Kart 64 battle mode. And imagine it in Team Battle. To be able to fight alongside your partner instead of sitting there bored would be great.
Actually, it doesn't necessarily have to be a dead player. There could be 4 players + 1 gamepad user. The gamepad user could once again tap to drop items and bombs. Either that, or he could interact with the environments to do various things. Imagine being able to create temporary clouds that players could stand on in the Yoshi's Island stage. Oooh, taking control of the Halberd and cruising through space, changing the environment while others fight would be cool too. In the Wario Ware stage, the gamepad player could choose what microgame the characters will need to face next. I'm not sure how this would exactly work, but imagine being able to actually DRAW the battlegrounds on the Pictochat stage.