LogFAQs > #898329801

I don't even disagree with what Sakurai said, although he phrased it poorly. The SSE as a whole took a lot of development time and, to put it plainly, it wasn't well-received. The cutscenes were one of the big selling points and a lot of people did just watch them on the internet, so it's not like they especially influenced people's intention to buy the game. The effect would be even more pronounced in the current era of social media. The time spent on SSE could have been spent on more characters, items, mode...essentially refining the multiplayer (or 1 v 1) experience that people actually care about when buying a Smash game.

Then you look at Smash 4, which was simultaneously developed for two very different systems while still adding a large number of new characters, and you can easily see why Sakurai scrapped the SSE in exchange for freeing up development time for other things.
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Black Turtle did a pretty good job.