It's not that essential. Ideally, if everyone were connected over ethernet, the online experience would be much better.
But the reality is that there are hundreds of thousands of people going online with Smash that are seemingly connected to their airport's wifi network, or the Starbucks across the street, or are using their phone to set up a public hotspot and are connecting through that, etc. It doesn't matter if you're connected via ethernet to a gigabit network with a ping of 5 ms, because the majority of people you're going to play will have abysmal connections. And your experience is only as good as the person with the weakest connection.
I would love if they somehow implement an "ethernet only" option in preferences, where the game also searches for others connected via ethernet. But as it stands now, so many people connect over shaky wifi connections that I've just lost all motivation to go online at all.