I was originally in huge favor of customs. That interest arose around when everyone started using customs and I sort of jumped on the customs train. However, nowadays, I'm not so sure. I'm not completely against them, but I'm definitely not in total favor of them like I used to be.
Pros:
This would mean that all debates of Palutena and Miis getting to use customs would be over. If everyone is allowed customs, then that means they are too and players of those characters are happy. It also gives most characters a few more things they can work with as most lower tier characters have at least one custom move that's better than one of the defaults. For example, even just giving Wizard's Dropkick to Ganondorf causes significant improvements for him. However, the best part of customs, I feel, is that they help to make Smash 4 more unique and set it apart from Melee. It also makes the players more unique as two players of the same character could prefer a completely different set of customs, giving a certain uniqueness to each player that default moves can't offer.
Cons:
I don't think it'll increase the overall character viability as much as people think. Sure, characters like Ganondorf and Palutena make huge leaps up the tier list with customs, but someone is going to have to take their place. Customs bring new things to the table and, if certain characters can't defend against these customs-only strategies, then they'll take a nosedive on tier lists. For a random example, what if, say, Ness gets hard countered by custom Palutena? It means that people will just start using Palutena against Ness players to beat them and those players will either place much lower or have to rely on a secondary to beat Palutenas. Therefore, Ness will drop on the tier list.
Also, certain characters, like Jigglypuff and Zelda, get next to nothing from their custom moves, making them even worse then they already are. The bottom tier won't disappear. It'll just become filled with characters who either A) have garbage custom moves or B) get completely shut down by certain customs-only strategies and won't make any serious impact as long as those strategies are around. Customs supporters seem to have this blind idea that customs will only help the entire cast. I assure you, there's plenty of harm to be done. The tiers will look different, but there's no way customs even come close to making everyone more viable.
The balance could even be made worse. Some customs that belong to top tiered characters are downright broken. For example, Sheik gets shield breaking needles, Rosalina gets a Falco laser, and Pikachu gets to kill you at 60% with Heavy Skill Bash. A customs legal meta will cause these characters to dominate even more than they already do, possibly making the balance of the game worse than default Smash 4. The game balance is one of my favorite things about Smash 4. Every character has something they can do and, as a result, you don't loose to the character as much as you do to the player in this game. However, this game was likely balanced only around the default movesets, not custom moves. If customs only disrupt this game balance, then I'm not in favor of them at all. We haven't done enough testing with customs to prove or disprove this, though, so that's why I'm undecided.
In my mind, customs should not be counted out because they're different since, most of the time, different is good. However, if they're just going to disrupt game balance, then it may not be the best idea. But, we have no idea of knowing this yet. I think a lot of smaller tournaments should start legalizing customs to experiment and we should see how things turn out before making a final decision regarding customs.