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There are two things that I really think hurt this game

1) The characters aren't that well know. A large chunk of Nintendo's characters have been in so many games, and have been around for so long, that everyone knows who they are. You could probably walk into regions of the world that have never had electricity and show them a picture of Mario and have a decent likelihood that people would recognise him.

2) One of the biggest appeals of Smash Bros. has always been the silliness of it. Few of the characters are the kinds of characters you would expect to see in a fighting game. In contrast almost half of the characters in PlayStation All-Stars Battle Royale could easily be used in a game like Soul Calibur or Tekken as a bonus character.