Michael "TYP" Cole:
Sakurai points out some chars are better suited for 2 vs 4 player and with or without items. Sakurai considers smash a party game.
The fact that some characters are better in different situations has always been true, and will always been true. For example, Bowser has always been a strong character for timed 4-man Free-for-All. He is much stronger in that environment than in 1-on-1 stock matches. It is just an inherent difference between characters who are good at combos versus characters who are strong at opportunistic knock-outs and endurance.
It is just a consequence of giving characters significant differences in their playstyle combined with a game that supports a diverse ruleset. It is simply impossible to balance every character equally for every game mode. Not without turning them all into clones of each other.
For a game like Street Fighter 4, it is theoretically possible to have every character equally balanced, since it uses a much more constrained ruleset. Every fight is a one-on-one match determined by hp with time only used as a limiter on match length, and every match takes place in a mechanically identical field. That is a much more restrained set of possible game conditions than in Smash Bros.
It is pretty much impossible to have every character balanced on every possible stage, let alone under every ruleset. The only real question is what kind of balance you are looking for, and what rulesets, if any, to prioritize. Probably the best thing to do is to focus on preventing outliers: characters who definitively excel or suffer under any particular set of conditions. As there as there are a good number of characters who are useful for any given set of conditions, the game will still be playable. Of course, it also helps to make sure that every character is useful somewhere.