Firstly because it's done by a group that is more or less holding the community hostage by enforcing their rules, and if you don't use their ruleset your tournament cannot be featured on any of the major brawl sites.
For the actual ban itself, a lot of players will get turned off by a decision to ban a character that they don't think deserves to be banned and furthers the perception that our community is stupid/scrubby as compared to any other competitive fighter. It won't attract any new players, and will only alienate those who oppose the ban, and they'll stop attending tournaments that use this ruleset (which is a lot considering that again, they have a lot of the community by the short-ones by not featuring tournaments which is scary for smaller tournaments because they don't want to be ignored) so overall attendance will drop in the future.
Outside of Super-Turbo Akuma, I can't think of a banned fighting character, and we're going to be the laughing stock of the fighting community even more because of it. And since Brawl is towards the end of its life, a lot of players also think that this radical change is just too late and if you were going to do something it should have been done a lot sooner when it may have actually had an impact on the community in a good way, instead of the crappy ways I mentioned before.
The international Brawl scenes are also laughing at this decision, and when you look stupid to the majority of the Brawl community, you know it's bad. Someone in the thread said "You know s***'s real when Mexico is laughing at us." That right there is truefax.
So in the end we're somehow going to look even worse than before, and end up losing attendance, just so bad players can think they have a better chance of winning even though they don't, and then they'll realize it and this whole thing will finally look like what it is: the dumbest move in the history of competitive gaming.
--
Official Board 8 Brawl and Pokemon Champion
http://images4.wikia.nocookie.net/board8/images/8/8b/ViviffChampS1.jpg