There are some detractions that could cost this from becoming a reality. Firstly Mr. Game and Watch a veteran member of the roster already has the 2D style fighting character gimmick claimed and has had such since Melee on the Gamecube. Also if the developers decide they want give new skins or costumes to the characters a model of Paper Mario could be used simply as a more intricate skin change for Mario himself.
Now that we have gone through the negatives less accentuate Paper Mario's positives. He has a uniqueness unlike anyone else that could possibly be newcomers in the next game. That all comes with such a brand new and fresh move set he would bring to the table by spawning his own items and weapons at ease to help him during the midst of a fight.
He gets my simple seal of approval as far as a newcomer I think would be a great addition to the game, you can check out my full opinions on this ordeal in the video below.