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Bones
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Not sure where you heard that, but most of the actual players take issue with the functionality, not the looks.

Traditional fighters use a digital joystick with a mere 8 unique directions. You do not have to be very precise to hit any particular direction. GameCube controllers have analog sticks with much higher levels of precision. There are several instances in Melee where, depending on the angle you hold your control stick

Yes. Unless a sport has a single standardized product, sports organizations ultimately have to make a determination about what kinds of equipment are allowed or disallowed. A big reason this would be such a headache for the Melee community is that literally every single competitive player uses the standard GameCube

“Smash Box cannot do anything that traditional GameCube controller can’t — you just input your moves differently.”