I find the wide variety of responses fascinating. Clearly a lot of it varies from person to person (internet speed, distance from router, apartment/house, types of walls, region of the country, etc). Speaks to how unreliable and variable WiFi connections are. I've had little to no lag (would probably rate online at about an 8-8.5 as an experience), while I see a large number of people screaming "unplayable"
I also guess sometimes it is just out of your hands, if you get paired with people who are playing on a 1mbps connection in a room with lead walls you will likely lag no matter how good your connection is.
Wish Smash had the feature a few other games have where it shows you the strength of your opponent when you get paired with them and you can evaluate whether to continue to the match or find a new person to play against (was it tennis that had that?).