The tier list is to show how characters actually rank in tournaments. It's kind of a vicious cycle, because only high-tier characters, like Snake (or characters that "counter" high-tier characters, like Wario -> Snake) are ever picked by players, making the tier list more or less solid. Should a low-tier character gain a few skilled players, he'll climb the ladder a few rungs because that character is shown to do better in tournaments for that season/time frame/whatever (like Pikachu, who I notice is now in the A-tier).
To sum that all up, the tier list is not completely arbitrary.