I think z-cancelling keeps the game from getting stale. Combos are already ridiculous in this game, and most of them depend on a z-cancel here and there. If you eliminated z-cancelling, then, in theory, these combos could be performed again and again consistently, no matter the difficulty. Maybe not 100%, but the success rate goes way up without having to worry about another variable that directly influences the outcome of a combo.
It's also a tool to speed up gameplay. Would you agree that being fast in this game definitely helps improve your chances at being good? I think somebody once commented on an Isai video explaining why he was so exciting to watch; he manages to input so many more moves than the next guy. And as an added bonus, he connects with most of them. In general, he is so much faster than the rest of us, and also efficient.
Eliminating z-cancelling would mean that anybody could be this fast without years of practice. It drastically slashes the learning curve that really creates player levels, and is actually sort of a buffer to slow down a player's progression. Based on most of our current styles of play, I think we can all agree that there is definite room for improvement. This improvement comes, in one way, from how well you are able to input buttons. The game actually allows you to improve, it's your job to practice and get better.
With Brawl, it feels like there's a certain threshold, where technical game skill matters no more, and it's more about mindgames and mental play. I believe a game should always give the player the ability to improve from a technical standpoint. Nobody can play on par with a TAS'd character, but we can continue to strive to achieve that. TAS'd SSB64 and Melee matches are incredible, whereas do you think Brawl would be? The ability to input more attacks depending on how well you've mastered the game is what justifies z-cancelling.
And before anybody misses the point, moving faster and inputting more button actions does not necessarily make you good.
I hate to make such an outlandish comparison, but the first thought that came to mind was that one Street Fighter match (you know the one) with all those parries. What if you only had to press one button to parry every hit of that attack? Not much skill, and not very interesting/entertaining/exciting. Z-cancelling is like that; it's another component to the game that requires skill to utilize correctly. Take that away, and you take away some skill needed to play the game. This is why I find Melee so amazing, watching high level players, and Brawl just sort of MEH when watching "high-level" players. You can tell who has more command of the game based on how they move. And, face it, z-cancelling is part of movement.