One of the reasons Wii Sports worked was because Nintendo didn't throw Mario in there when they just as easily could have. Nintendo would have had a harder time reaching casual gamers if they marketed Wii Sports with the most recognizable face in video games. I consider almost every Nintendo franchise not Wii-branded (Sports, Fit, Music etc.) to be "core" IPs. That said, Smash Bros. is a hardcore series. When you throw in a bunch of gaming characters into one video game, you already relinquish a great deal of accessibility to the general population. Casual gamers are already turned off because, in their minds, these are characters they've already avoided because video games just aren't their thing. Fair enough. In that sense, I completely disagree with Sakurai's view of Melee.
However, I do believe part of what makes Smash Bros. great is its accessibility. It's far more accessible to core gamers who aren't versed in fighting games. I flat-out suck at traditional fighting games. I like them, but I just can't get the hang of them. I love Smash Bros. though and I can find a certain level of success playing it. I don't actually consider Brawl to be more accessible or easier than Melee, just slower which makes it a different playing game rather than one casuals may necessarily enjoy more. Additionally, some of that accessibility, playability and fun is lost when the gameplay is so unbalanced. You can't just pick any character and have a fair or close to fair chance of succeeding which not only makes the game less fun, but makes the game worse overall.
Understanding your audience is key. Nintendo will probably never get the vast majority of casual gamers to ever care about Mario, Samus, or Link. They don't have to either. Continue making games casual gamers and core gamers alike can enjoy like Wii Sports, but stop trying so hard to convince casual gamers to like hardcore games. They won't and those core games suffer because the development lacked focus.