I don't even know who that is.

I like shovel night... but he far from the gaming icons other third party characters are... snake, sonic, megaman, and pac man are all "icons" shovel night has 1 game and it has been out for less than a year...

How about Showel Knight (and many other characters btw) first having to graduate by going through Assist Trophy period first?

But why? How does he represent any part of gaming history? Shovel Knight isn't the only indie game. It isn't the most important indie game. It isn't the first Nintendo indie game. It was only a timed console-exclusive. There was only one game. It wasn't the first successful kickstarted indie game. It was only released a year ago.

Shovel Knight might be a good game, and he might "fit in" design-wise, but there's no good reason he should be in the game when you consider his pedigree. People are applying first party selection logic to third party characters. Megaman was iconic to the NES, the console that saved gaming in the US, and kickstarted Nintendo's gaming carrier. Shovel Knight has nothing on that and, to me, only 3rd party characters with that kind of importance deserve to get in.

He's from Cave Story. A very highly acclaimed and important early indie released five years ago.

It would be pretty awesome.

I would say he is one of the more recognizable indie characters in gaming right now.  I mean, Shovel Knight got a lot of mainstream praise and attention compared to other indies.  I think that's a legitimate reason he would be fitting.  I mean yes, there are older indies and bigger indies that are full franchises.  However, Shovel Knight is one of the first I've seen that was just covered by what seemed like everyone.  So I would say that in a way, he is a good icon of the recent indie rise to more mainstream status.  There are other indies that could be considered, but I think Shovel Knight's recognizability makes him quite a nice fit. 

And like I said, I was thinking of him as being a rep for indies in general, which I think is a cool idea.  For 3rd party characters in general, yes there are other worthy candidates. 

Cave story ;)

The way to "graduate" would be to have a number of high quality games in your franchise over a period of several years.  That being said, I wouldn't be opposed to Shovel Knight as an assist trophy, but that wouldn't make him any more worthy of fighter status.