Nester might have a game, but I honestly lump in with Kevin for the reason that said games never got to Japan, and if the games don't get to Japan they might as well not exist to Smash Bros. Duck Hunt represents the Light Gun, but that's limited to Duck Hunt, Hogan's Alley, and Wild Gunman. But games like To The Earth or Gumshoe don't even get a trophy. Heck, Barker Bob's Trick Shooting is the only other game the Duck Hunt dog is besides VS Duck Hunt and that gets nothing to its credit either!
Likewise, look at Kid Icarus Uprising: the game constantly emphasizes Pit's last adventure was 25 years ago-- completely ignoring the US exclusive Gameboy title "Of Myths and Monsters".
So Nester, whose only real "appearance" in anything was having his design used as Lark in Pilotwings 64... well...
Both supporting and contradicting your point, because life is funny like that:
Nintendo is a Japanese company, and even if it wasn't, the Japanese market is incredibly important when it comes to video games (among other things). It is perfectly reasonable for perceived popular opinion from Japan to influence Nintendo's decisions. Yet, I was under the impression that Ridley would never be a playable character and Shovel Knight would never show up at all in Smash Bros. because neither is popular enough in Japan. So sometimes, Nintendo goes against what "Japan" seems to want.
That something never released in Japan explains a character's lack of popularity, but when we're dealing with games that are so old, I don't think it becomes a credible reason alone for exclusion. Nester's Funky Bowling never released in Japan, they didn't get Nintendo Power (of if they did, it wasn't like the North American version) so they don't know Nester and if they know Howard, it is because he's basically the alter ego of Howard Phillips (former face of Nintendo of America). If for some reason, one or both of these characters suddenly became hugely popular in Japan, the fact that Howard never appeared in a game and that Nester never appeared in a Japanese game (and appeared in only an obscure one elsewhere) would not keep either character from appearing in Smash Bros. Other factors could; I don't know who owns the rights to either Howard or Nester. Oh, and I know no one brought up Howard, but the two were best as a duo. Well, maybe Nester with his son would also work.
Anyway, the main thing I'm hoping for now is that we see more crossover between Assist Trophies, Boss Characters, Characters, and Stage Enemies (Hazards). Right now, a character appearing as one means it won't appear as another except for the recently revealed Rathalos and (IIRC) some Pokémon. As soon as we have more crossover between any and all of these, seeing a character appear as one stops being so bittersweet. Becoming an Assist Trophy, Boss Character, or Stage Enemy becomes a potential step towards becoming a playable Character. The first step is the easiest; not getting an existing Assist Trophy, Boss Character, or Stage Enemy as a playable character, but having some playable characters also show up as one or multiple of those three. After all, the needed assets are already in the game at this point.