As long as the aesthetics mix, I don't really mind. Link worked really well in Soul Calibur II, for instance, and Yoshi themed levels seemed natural in Sonic. The Bayonetta costumes looked stupid to me, though I wasn't really interested in that game in the first place, so it's not like it hurts my opinion any. Samus in Monster Hunter is something I'm not so sure about. The Link costume works well in that universe (part of why I pre-ordered it actually), and there are plenty of talking animals to make Isabelle believable. Metroid, though? I don't understand how that would work...it seems like an entirely different universe from Monster Hunter.
Though, I also think it's a bit unfair to treat character costumes as the same as actual character cameos. The latter can dilute the brand if over-exposed (as opposed to random nods here and there), but I don't think there's anything wrong with the former. If anything, Nintendo has a huge enough legacy, that references to their characters within other games shouldn't be frowned upon IMO. Just as long as it doesn't ruin the tone of course.