Smash isn't going dormant for any longer than the regular gap between installments, and that isn't dormancy by any reasonable definition; if you ask me Star Fox and Rhythm Heaven aren't dormant yet, only if they miss the Switch generation entirely.
With Sakurai supposedly leaving the franchise (didn’t he say Ultimate was his last Smash game?)
He didn't. He did say that during Brawl's production though, and look at how well it panned out! It's the methodology he has for all of his major projects; treat each game like the last one he'll ever work on, and put his all into it. I believe he viewed Melee and Smash 4 as the Last Ones during their production too; hell, probably Ultimate as well. Doesn't mean that's the case though; as he described in his Famitsu Column, during Ultimate's DLC production he still had no idea what he would be working on afterwards, so for all he knew it could be his last ever project, but chances are it won't be.
Smash is never going to go back to having a small roster unless it completely reinvents itself into a different sub-genre of fighting games, like an arena fighter; and I think the chances of that happening are very, very low. As much as the dedicated competitive players enjoy the gameplay and mechanics, it's the characters that sell the series to the majority of the audience. There's a very good reason why Everyone is Here happened in the first place after all: cut veterans were among the most requested characters on the ballot; even when people had the opportunity to ask for totally new characters that hadn't been in Smash before, they still requested their favourites from older titles, even Pichu and Young Link. I think they'd be wise to retain as much of the roster as they can the next go around.
During Smash 4's development Sakurai said the roster at that point was getting too big and the next Smash would need to downsize, and now we have Ultimate with 31 more character than those games. I think Iwata put it best really:
As new titles were added to the Super Smash Bros. series, the cast of characters grew and new modes were introduced, so that each installment boasted an exceptional volume of content. In general, I think that making a game bigger is oftentimes not the way to make it better, but with Super Smash Bros. I see things differently. It felt right to squeeze as much in there as possible, like some kind of a bottomless vessel, the sort of game where quantity works.
