An Fzero mod as DLC would be cool

No, but an F-Zero themed DLC cup with four iconic F-Zero tracks and the return of the Blue Falcon Kart would be rad.

But if people associate F-Zero as Mario Kart, wouldn't the sales of this new F-Zero be higher? F-Zero fans will see this as a new F-Zero game with Mario Kart features and Mario Kart fans will see it as an expansion pack for their game.

I would rather just have an F-Zero game on its own.

No honestly this would be better off as its own game.

I would actually be very happy with something like that "if" it's the only way it would ever happen.

However I'm not really sure how it could factor in, as the courses in Mario Kart aren't really suitable so it would be pretty much developing another full game regardless, even if it shared the engine. If it did that, were any Unreal Engine 3 games reduced because other games used that engine?

Besides VG Chartz, I didn't think anybody still care about F-Zero actually.

Except N64 Rainbow Road.

Your point though I agree with, F-zero racers on any (other) Mario Kart track would feel wrong. In real life if you combine go-karting with Formula-1 all you get is this:

I think Nintendo has to revive F Zero franchise with Metroid style revival.

No thanks. Proper F Zero, yes please.