Of course it doesn't need to exist. If things were decided by "need" then the NES and SNES classic both would have flopped terribly since these mini consoles are such a terrible consumer value, which would result in the PS Classic likely never being pushed out. As it is though, stuff like this isn't determined by need. There's a non-insignificant group of people that want to throw down much, much more money than these cheap things are worth and so businesses will continue to exploit its fans for the easy money. If you are thinking with your head, then yeah, there's no way this thing is worth $100.

I have very fond memories of Battle Arena Toshinden. Now I'm slightly interested.

You list some decent mentions, while others are reaching.  None of them are as synonymous with the SNES as the missing titles from the PlayStation Classic are to PS1.  Square has 3 RPG's on the SNES Classic already.  One of them was going to get left out, and it happened to be Chrono Trigger.  If the console wars are anything to go by, Mortal Kombat is far more associated with the Sega Genesis than the SNES.  That is why Street Fighter II is represented on the SNES Classic lineup over both Mortal Kombat & Killer Instinct.  Aladdin & Lion King don't exactly come to mind when thinking of must have SNES games.  The Dragon Quest games you mention, I don't think were ever released in NA.  NBA Jam was popular back then, but hardly synonymous with SNES (sold better on Genesis).  Not one of the titles you mentioned was a Top 10 seller (some not even Top 25).  Meanwhile, the PlayStation Classic is missing several Top 10 titles, i.e. - games synonymous with the system.

Actually, they're really not. Nintendo charges a lot for old games (like anywhere between $3-$7) and on their most recent console they don't even have VC. Even if Nintendo had it, buying all those games without the extra hardware would probably end up being nearly as much as a SNES Classic. At least iirc. 

I'm going to have to pass. Having never owned a PS, I was mildly curious by most of those games aren't to my taste. Final Fantasy and Metal Gear Solid have never really had me on board, and I'd probably even struggle with the original GTA given how much the series has evolved over the years.

The few games I'm actually interested in I already own on PSN, so I'll probably be passing on this one. I know I'm not really the biggest PS1 buff, but I haven't even heard of a lot of these games.

Battle Arena Toshinden - 0.65 Million units in the west. 

Destruction Derby - 0.9 Million units worldwide

Intelligent Qube - 0.22 Million units in the west. 

Jumping Flash! - 0.3 Million units worldwide

Mr. Driller - 0.4 Million units worldwide

I've never even heard of these games before. There was almost no media coverage for these games when they came out. Fans don't talk about these games or even mention them. 

I wanted:
* Crash.
* Spyro.
* Final Fantasy 8 and 9.
* Command and Conquer.
* Red Alert at a minimum.

Beggers can't be choosers though I guess. - Looks like I am hacking it like my SNES and NES Classics.

Nah, they're gearing up to reveal a remake. Trust me.  

Well, this is what happens when your legacy consists on mostly third party games.
Although, that doesn't excuse the lack of Legend of Dragoon, Tomba or Ape Escape. Or controllers with analog sticks for that matter.
I guess the Playstation Classic it's just the result of lack of first party legacy, Sony being stupid and stingy and third parties having better plans for some of their respective franchises. In short: a disappointing failure.