The melee attack wouldn't work well from a gameplay perspective. Remember how most people who can't direct Sonic when playing Brawl, just spin him all over the place, and many times fall off platforms.
Sonic may not be the best character in vBrawl (in Brawl+ and Brawl-, that's another story!
), but the basic thing that any body who dares to main him could say? You don't try to spin all over the place. You use Sonic's speed, range and array of attacks to your advantage in a fashion that allows him to "hit and away", frustrating the opposition because a good Sonic should rarely be cornered, much less actually be hit. I at least believe Sonic controlled well, in that game.
The homing attack is necessary, because Sonic games have never been about very tough enemies. They've been about straight progression. And no, Sonic is trying to do much more than before. It's the very notion that they haven't been able to make him do more than before, that makes the games bad in the first place.
Incorrect statement in my eyes, and I'll tell you why.
The notion that Sonic that has been doing more than ever is NOT what's inherently wrong. It's actually based on the notion that Sega has been forcing Sonic to wear so many hats, with no real rhyme+reason to go along with it.
Pretty much every "gimmicky" thing that Sonic has had in his games from these last few years, from the extra play-styles/characters in the Adventures, the "Teams" in Heroes, to the Werehog and Sword-wielding in his most recent offerings, has NOT been given the kind of quality control that it could have been. And that is where the problem lies. Nothing is giving the time it needs to truly develop, and Sega is just as quick to force the team to focus on some new gimmick for a new game.
Case in point: they were quoted on saying that "we'd be seeing more of the Werehog". Well...here are, with yet another Sonic release, and the Werehog has yet to be seen (and likely won't be) in Sonic Colors, which focuses on yet ANOTHER set of gimmicks.
You gave an example of Mario and Dante. But it's much different. They don't move at the speed Sonic does, to which would be much difficult to implement a straight combat mechanic that isn't locked on.
Again, I think the main thing is that it's a challenge unto itself to ascertain just how "difficult" it would be, until it was placed in the hands of a more competent development team with a decent amount of dev. time to its credit. Even Sonic Team was capable of some definite good ideas, such as the "Bounce" ability that Sonic had in SA2/Battle. In my opinion, it was a good answer to Mario's "Butt Stomp", as well as an ability that guaranteed how Sonic would move in a 3D space: straight up, straight down, unless there was other DI from the user. You can't get too much more precise than that, and control of Sonic remained firmly in your hands, and not trusted to the lock-on attributes predetermined by the game itself.
That's a basic ability that could have been honed over games, and served to develop Sonic's own moveset that much more. But...wouldn't you know? It was taken away, and later replaced with other things by the very next game...