After considering joining the site for a long time, this finally pushed me to register.
I've always been in support of customs. Mind you, I'm no high-level player and I've never even been in a real tournament. I don't even know if there's a scene anywhere around me. However, I still try to play in a competitive way and my opinion has always been that completely ignoring such a large part of the game (a large part which puts a large part of the cast on equal footing and adds tremendous depth to the game) is simply unreasonable. I can't think of any way to defend this viewpoint other than, "it's my opinion", and that's obviously not a good defense.
People who say that customs, any customs, are broken are wrong. Kong Cyclone is broken because it has a wind box and super armor? Then let's ban Charizard's Rock Smash and Sheik's Grenades while we're at it. Custom Villager is too campy? Villager is already too campy. Thunder Wave is broken because of the infinite? Ban Link's, Fox's, ZSS's, Swordfighter's, and Dedede's infinite-causing moves, too (I know some have been patched but my point still stands: they weren't banned). Helicopter Kick kills from down throw too early? I don't seem to remember hoo-hah being banned…
At the very least, I think Palutena and the Miis should be allowed ONE custom set in a non-customs rule set, and that this should be considered, for all intensive purposes, their "default" set. Miis are custom characters by their very nature, you can't even play as one without going through the customization screen. Sure, you can choose to leave everything as is, but, in my mind, that's the same as opening up Mario's customization screen, not changing anything, saving the set, and calling it a "custom set". Illogical. I'm not about to debate whether the Miis should be allowed; they're characters, get over it. As for Palutena, her "custom" moves are much like the Miis'; they're so drastically different that they should really be considered completely separate moves. She was obviously designed with custom moves as her priority. Just look at how much better her normals work with Lightweight!
Alright, I think this post is long enough, but I will say that, ideally, each character should have an optimized custom set to go along with their default, with Miis essentially getting two "customs" (but not really) sets and one optimal size. Thank you for your time.