I mean you kinda do. The death zones are different in Smash and 8-player Smash. It's much easier to die from the side of the screen in 8-player Smash as opposed to regular Smash. Plus 8 player Smash doesn't track your kills and that in between menu is perfect for quickly editing individualized control inputs.
And having separate menus keeps the game from automatically setting inactive controllers as players as well and there's separate events in the event mode for single player and co-op and there's different stats for single player and co-op in the stadium, classic and all-star modes.
That's the kind of stuff that should change on the fly, not up front.