We do know that Simon Belmost isnt anywhere CLOSE to the popularity of Snake right?
Yes. But as I mentioned before, there are other factors at stake. The most important thing here is to choose a character that fits the series and is appealing to the Smash audience. And since said audience is comprised of Nintendo fans, then a strong presence on said platforms is quite relevant. It doesn't have to be the most popular character, just popular enough.
If it were purely a popularity contest, then Mega Man wouldn't be in. Even just looking at Capcom, Leon S. Kennedy is arguably more popular, and probably around as popular as Snake. But Mega Man was one of the most requested 3rd party characters from Nintendo fans, and he fits the nature of the game more. The same applies to Simon Belmont and Bomberman, in my opinion.
Of course, these are far from being the only alternatives... Not to mention how you don't even have to put another 3rd party character in there. There's plenty of Nintendo characters that could benefit from being on Smash, like Marth, Roy, Lucas and Pit were, while being appealing on its own.