True it will be hard to do.
That is why I think Capcom vs. Nintendo would be the easiest. Nintendo would fund the game or partially fund the game, and Capcom's animators and such would create the new sprites and animation for the game...under Nintendo's watchful eye. Nintendo and Capcom could both donate talent to form a small team to develop the game and create unique moves for the new Nintendo characters.
I could see SNK characters being in the game...but it really wouldn't be neccessary with Capcom being able to put:
Strider,
Mega man,
Street Fighter Characters,
Dark Stalkers Characters,
Dante,
Viewtiful Joe,
and Nintendo providing characters like:
Any Melee or Brawl character.
Mario,
Link,
Pit,
Samus,
Kirby,
ect,
And before you say Nintendo already has a fighter with Smash Brothers, this is fundamentally a completely different game and play style...so they could co-exist.
And I do agree...Nintendo would own Japan with this game exclusive...and I think would gather huge support in all other territories. Just look what Jump Super Stars did for Nintendo DS sales in Japan. Imagine if that game was released world wide.