Think about this. Samus vs. Fox. Both have 1 stock, though Samus is at 110% while fox is only at 17%. Samus has a charged blast ready, but is getting combo'd with drill kicks, jabs, grabs and other aerials. It seems hopeless for Samus but then she gets in an u-tilt, which sends Fox a short distance off the stage. He's recovering when WHOOM, in comes a Smash Ball! Samus charged blasts it, the screen goes dark and BAM!
This may have already been said, but things can get MUCH worse.
For example, if one character is on high enough damage, and a smash ball appears, the other would produce a high knockback attack (which would most likely be easier to force upon a non-resisting character (they're getting the smash ball, not fighting.)), and could knock them out.
The character then gets the smash ball, quite likely KO'ing the character again easily.
Then amplify it to Peach-ish proportions.
Peach (even if on moderate damage) produces a high knockback attack on say, Fox - knocking him out. She then takes the recently spawned smash ball. Holding it, she manages to get Fox to a percentage and position where she is able to KO him with a fully charged smash attack, she may sustain damage, but who cares (as long as she keeps the smash ball). She Final Smashes, KOing Fox, and replenishing a large amount of health. Fox is now 2 stock down, and Peach is on low damage, if not fully renewed.
Just that is enough to condemn smash balls, in my opinion. Sure, the numbers may not add up and I may be overestimating Peaches' KO ability, and her Final Smash, but it's definitely on the table.
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Now, take the first scenario. Is it better to let the other opponent chase the smash ball, and attack them while they're distracted, or go for it, and risk being picked on? This may sound like it's adding more strategy, but it's just taking away from the fighting skill of players.
Now think, if the character who first runs for the Smash Ball can sustain potentially high damage, why would a character run for it (especially if their attempts to break it will likely be interrupted brutally - with no Final Smash to make up for it)? This will likely result in Smash-Ball-Standoffs (I'm totally coining that term) - Both characters continue to fight, as neither wants to risk the damage done if they run to break the Smash Ball.
And eventually, (I'm not sure if this has already been said) characters will be rated on their capability to take, and hold a Smash Ball, if they are allowed in tournaments. Let's say we have Character A, poor aerial moves, poor jumping ability, a.k.a poor capability to break a Smash Ball. Then we have Character B. High aerial damage, great ability to stay in the air. Character B has a much better chance of obtaining, and using a Final Smash. If the Smash is anything less than horrible, Character B will be unusable against this character.
The capability to hold a smash ball is less significant, for most characters. However some, such as Mario and Samus will need a great holding capability to use theirs. If either are combo'd easily, they lose the possibility of a Final Smash (most likely), and still have the damage they took while obtaining the Smash Ball (see first paragraph under the dashed line - while characters obtain a smash ball, they will likely sustain high damage.)