Legitimate Reasons

Masahiro Sakurai said that Super Smash Bros should remain a celebration of Nintendo's video game history, which also happens to include third-party video games that appeared on Nintendo platforms before, meaning that non-video game characters are not allowed at all. However, there is another reason non-video game characters are not allowed in Nintendo's crossover dueling tournament series, and it has something to do with universal scale destruction of all life, and possibly worse than what Galeem or Dharkon is capable of.

While Pokemon's Team Galactic was considered as the most sinister criminal syndicate in the history of the Pokemon series, due to their evil plan to destroy the universe and recreating it in their image, their level of success would, however, be nowhere near that of Sailor Moon's Sailor Galaxia, who could have brought all life in the universe to an end, and actually came way closer to accomplishing that than not only Team Galactic, but also just about any Dragon Ball Z villain you can think of. Even if Team Galactic acquired Giratina, who was supposed to be based on the fallen angels from the Bible, Team Galactic would still be nowhere near Sailor Galaxia's level. Compared to Tabuu, Galeem or Dharkon, many of Sailor Moon's enemies are incorporeal, and would be way harder to defeat than these three bosses.

For those who wonder where the stabbing incident that "killed" Princess Sakura at the end of Tsubasa Shunraiki came from, it was actually extracted from chapter 178 of the Tsubasa Reservoir Chronicle manga. The manga's level of violence is so terrible it would actually make the Pokemon Adventures manga, which contains the darkest version of the Pokemon World known to exist in any official Pokemon canon, not as dark as you think. And that is excluding chapter 200 of Tsubasa Reservoir Chronicle, where Princess Sakura was devoured by a death seal placed on her by Fei Wong Reed. The most tragic part of it was that Princess Sakura had no idea that Fei Wong Reed placed a death seal on her, and she was nowhere near as dumb as Red or Ash Ketchum, both of whom are notoriously dumb protagonists, and yet, Red is in Smash.

When there are anime characters who have the ability to destroy entire planets, or even the entire universe, it's better that Super Smash Bros should remain a video game characters only tournament. Therefore, we should respect Masahiro Sakurai's policies, if it means not having anybody far more destructive than Galeem or Dharkon, both of whom could have possibly killed billions of characters, become a playable character. Otherwise, the game would become almost unplayable...