I think it would be hard to make a whole moveset for Lil Mac in the sense of it being varied. A lot of his moves would involve punches, let's just say he gets Petey's specials then what's left for his A moves? More punches, his Up+A would be an uppercut as well?
They could have chosen to add some kicks in as well, but I think this would ultimately make a bit of a boring character as he doesn't really have any really flashy moves.That's maybe why he didn't make it, but still just my opinion.