Here's what I think.....
I think Yoshi is a wonderful character; he's cute, kicks butt, and is always there for Mario when he needs him. Basically, he's Mario's side-kick. Miyamoto thought, "Instead of a horse, why not a dino?" It was a creative idea, in my opinion.
Toad is a mushroom and doesn't fight that often. He's really not all that important; his job is to protect the Princess, which he does badly. Mario wouldn't have to save her sorry butt if Toad just did his job. In my opinion, he should be used to blow up enemies with suicide bob-ombs, 'cause there are alot of Toads.
So there you have it. Toad is more of a sacrifice character, while Yoshi is a strong side-kick that Mario needs.