I daresay that MK64 had the best Battle mode.
I daresay you haven't spent enough time with MKDS's battle mode.
My main gripe with MKDS's battle mode is the bizarrely wide open stages that required nerfing the red shell's target tracking ability and made green shell ricochets a non-issue. The other stages are fine and the other changes I can remember were all for the better. I even liked blowing up spare balloons. It was such an improvement, it makes the Epic Fail that is MK Wii's battle mode all the more depressing.
However, MK64 gave us Block Fort, which is still the greatest battle mode stage in the entire series. The best one created since is Twilight House. Pipe Plaza would be truly great, too, if only it were larger. If the pipes connected to a second area, it would probably be the second best in the series. Neither of those is as good as MK64's Skyscraper (and if you're going to call me out, Skyscraper's small size and openness are made up for by the opportunities for death-defying escapes, not to mention seeing how far out you can get your minimap icon to go

).
I'd also like to mention how much I miss a feature from the original game's battle mode. When you ran over an item block, it didn't immediately respawn. You had to use nearly every item block on the map before they'd all respawn en masse, which made for some very tense moments trying to avoid your opponent while hunting down one of the few remaining blocks. I'd really like that to be an option in later games. It would make the upside-down item block a more effective trap, at the very least.