Seeding, I agree, ruins a lot of good possible matches and runs. I think it would be unfair on the highest nominated characters non-Link characters if you scrapped it though - you'd likely get a 16-pack with 2-3 noble niners slaughtering each other at the start of the contest and someone like MMX making the SFs. The more I think about it, the more I think it could actually be quite cool to have a seedless character contest... hmm.
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Praise the Black Turtle, Game of the Decade Guru Champ.
(Well, I never promised creativity, did I?!)