A couple days late, but awhile back VirtualTurtwig posted on /r/smashbros, Ivysaur and Squirtle were planned for Smash for Wii U/3DS…but were scrapped. Quick video. The post has the same information.
I made a comment pretty late to the thread stating the following:
For the first part of development, Bandai Namco worked on porting Brawl to the 3DS and Wii U. This actually occurred while Sakurai was still working On Kid Icarus Uprising. [The full timeline is here]
Shortly after, once Kid Icarus Uprising was finished, then the Smash for Wii U/3DS project plan was finalized, and work began on updating the engine and veterans, creating new characters and content.
MetalGear, Ice Climbers lack an emblem reference which in my opinion means they didn’t get that far in development (and Metal Gears sound folder was replaced by MegaMan). Sakurai tried removing bones and gravity but the duo couldn’t work. That probably happened very early in development…[possibly before Sakurai joined development].
Sakurai hasn’t commented on Squirtle and Ivysaur. The character database seems it was cleaned up (for the most part, the Virus boss character was the only thing I found), so it’s unknown how far, if at all they got into development. However, since other characters from Brawl are in the game, the nus3bank is most likely built upon ported assets from Brawl. The files only exist in the nus3bank…extracting the files reveals that Squirtle, Ivysaur and the other cut Brawl fighters don’t have narration files. Therefore, it doesn’t tell us much about Squirtle/Ivysaur.
So sorry, it doesn’t seem that Squirtle and Ivysaur got that far into development (at least, there isn’t ANY proof of them).