I'm going to be honest, with Knuckles being an assist, it seems to me that Shadow was almost in. The only possible explanation as to why he's not in, is that SEGA must have said no to him being an echo because muh "HE'S SO DIFFERENT FROM SONIC"
ITT: Characters that deserved to be in Smash Ultimate
Adrian Green
Cameron Phillips
Piranha Plant was going to get in no matter what. They knew they were going to have DLC and Sakurai wanted the bonus character to be both a surprise as well as someone that EVERY gamer from every background could recognize. Someone like Isaac, Geno, or Banjo would never fit that mold, so they don't really "compete" with Piranha Plant.
Same kinda goes for Shadow. Given that his most logical fit is as a no-effort Echo Fighter, his inclusion doesn't really come at the expense of anyone else. A lot of people who had guys like Waddle Dee or K. Rool as their #1s also had Shadow somewhere in their Top 10. He definitely seems to be the best example of a "complimentary" character and would have been perfect to make that last Direct feel slightly more hype than underwhelming.
It hurts even more given that he has the same damn color scheme as Ken and Incineroar. He would have fit in perfectly.
Lucas Fisher
>is that SEGA must have said no to him being an echo because muh "HE'S SO DIFFERENT FROM SONIC"
I have no clue why people would think this given the amount of times Shadow has been a 1:1 of Sonic within their own series. Maybe SEGA just doesn't want Sonic to share the spotlight in a crossover that they don't have any direct control over. It was SEGA's fussiness that got Sonic into Brawl so damn last minute to the point where it had to be delayed, so it figures they wouldn't be fully onboard with one of Sonic's friends right away.