Any company can go through down times and make a comeback.
Everyone said the same thing about Disney in the 70s and 80s. They made some good films in that timespan, but it's not like they were innovating and turning out a Snow White or creating films on the same level as Cinderella or Bambi. Everyone knows Cinderella and Bambi today, but who can name at least four of the Disney animated features released between 1968-1988?
In fact, Disney was profiting a lot from re-releases of earlier movies. People still came out to see Snow White forty years after it came out (people would still come to see it eighty years later). Everyone appreciates a classic like Snow White, just like people appreciate well-done new stuff. Trouble is, the new stuff just wasn't living up to the Snow White standards set by some. That's not to say Disney wasn't releasing new stuff, but it wasn't as well-received as the old. This also extended into TV, where the New Mickey Mouse Club, despite being a good show, never gained the traction of the original 1950s show.
Nintendo is likely in the same position right now. They had their big hit with characters in the 80s, just like Disney did with Mickey, Donald, Goofy, and the other cartoon characters. They made it big with particular games in the 90s, with or without those characters, sort of like Disney did with Snow White and subsequent features.
Then, things got stale. Disney kept coming out with random films about talking animals. Nintendo kept coming out with new ways to rehash old games.
Disney had the "renaissance" starting in with Little Mermaid, then Beauty and the Beast, Aladdin, and Lion King. Those four films were huge winners in every respect and still are, becoming to Gen Xers and Millenials what Snow White was to the Greatest Generation. After another period of dud films, they hit it big with Tangled and Frozen this decade.
As you can see, things go in cycles. Nintendo will do the same as long as they keep up with the times. The humor, music style, and animation style of Little Mermaid is different from that of Snow White since it needs to be kept current and appeal to a new generation of viewers. The same is true if you compare those films with Frozen. Nintendo will have to do the same with games. You can't have Mario Party 18 where it plays just like Mario Party 1. You can't have New Super Mario Bros games that all look and feel the same. You can't have stupid and overused storylines.
At some point, you may even need to introduce a new character. Disney did this with the princesses. Everyone thought the sorority roster was complete until three new ones came for initiation in the past six years. This came, of course, after a decade of crappy sequels to the original movies. Look at the current Smash Brothers roster. Most of those characters fall into these categories: Nintendo icon, clone of Nintendo icon, supporting character unfamiliar to someone who hasn't played that franchise, or character from a long time ago that nobody really cares about because they haven't had a game in years. (No Earthbound games since 1995 and we still get their characters? That would be like Disney having Ratigan as a meet-and-greet character).
Trouble is, Nintendo is in the process of making crappy sequels. Everything feels like it's already been done before. To get to the original question, Miyamoto is still good for Nintendo if and only if he can get his creative genius back. Otherwise, you need to draft a new team, and you need to make it one on par with the one Disney used from 1989-1994 and from 2010-2013.
One final note: on the subject of Smash Bros and the other games with many characters, let's cut the rosters down. The Wii U Smash Bros has more characters than anyone would know what to do with, and Mario Kart 8 is the same way. 12 is a good number, 16 is a bit high but could work. Anything more than that is just chaos--it's like a Christmas card list where you have to remind yourself how you know those people.
