Okay, first of all, the game is supposed to have around 40 characters from all the rumors that are flying around. Now, with that said, I want new characters. Not clones. Taking out clones means new characters take their place. Is that simple enough?

Second, you don't just copy and paste a character from Melee into Brawl. That's not how it works. This isn't RPG Maker. It's using a different console with a different physics engine and who knows what else. Copying and pasting does not work. Creating a character takes time. Have you ever tried to create a character in something as simple as MUGEN? That takes a ton of time and it's much more simple than the shit real developers have to deal with.

Adding a character, clone or not, is not a simple process. If it was, we would already be playing Brawl.

You also have to look at this from a business perspective from Nintendo. In business, there's something called the law of diminishing marginal returns. What this basically means is that beyond a certain point, adding more units of input (characters) will give you less and less output (players in this case). So while adding an extra character to a roster of 20 might give Nintendo 100,000 additional players, adding an extra character to a roster of 30 would yield only 60,000 additional players, and adding another one at 30 characters would only produce 35,000 more.

So basically, beyond a certain point, adding more characters serves Nintendo no benefit at all and may even actually cost them money, if the addition of that new character would cost more than the potential revenue earned from the amount of additional players gained from the addition of that character.

Nah, I still disagree.  I think it is relatively easy to port an existing character from Melee into Brawl.  But I don't want to argue this.  Even if I was working on the game myself and knew precisely what it took, it is still my opinion whether or not it is "simple".

Games ALSO don't have thousands and thousands of characters because that is possibly the biggest turn-off for a fighting game.

This is obvious.  Unless I am misunderstanding you.  This is why games don't have thousands and thousands of characters.  You don't have to explain this to me.

Nintendo only has so much time and money. Why not invest it into new characters?

Doesn't matter what either of us says though. Doesn't seem like we're going to be able to change each other's minds.