In Smash, there are two aspects of a player: The technical capability and the mental strategy. I don't want to use the term mind games as it is just used way too much these days and often incorrectly at that.
It is my opinion that the mental aspect of the game serves as a far more important component to gameplay than technical skill. This is why people who have recently learned wave dashing and such may find themselves still not beating everybody in their group who doesn't do the techniques.
Technical skill is simply the level at which a player can control the character. How fast can you move, how well can you perform the advanced techniques, how often do you make mistakes in movement or attacks? How good is your timing? Although there are many more parts to it, that is enough of an example to show basically what it is that I am trying to say. Technical skill is required to be able to do well in a competitive environment and it can take a long time to get to a high level depending on the person and the character. However, it is of a lesser importance than the other aspect: The Mental one.
The mental game is what separates the good players from the great ones. Every "good" player can do what they want to do most of the time. They can wave shine, pillar, moon walk, ect... with no real issue. Then why do some players do better than others in tournaments? It all lies in how they play the game using what they know.
Some of the terms used earlier in the thread fit into the mental aspect category: Observation, Adaptation, Knowledge. Knowledge can probably be used interchangeably with experience. A Smasher who has been to many tournaments will in all probability be able to beat one who has not been to any, but that is common knowledge.
Knowing what to do and how to act in different situations is absolutely imperative to the game. Being able to learn from your past experiences ties into this. Many people simply watch matches at tourneys just to pass time until it is their turn. Others will watch the matches and learn from them. What are the players doing, why are they doing that, are their choices logical?
When you are playing a match and you find that what you are doing isn't working, do you give up and assume that the opponent will win the match or do you try something else? The ability to change your tactics on the fly in the middle of a match is critical to being a good Smasher.
Simply put, the concepts of knowledge, observation, and adaptation all tie into each other. You can't really adapt without knowledge of what to do in said situation, and you can't have knowledge of what to do if you have not observed it before. It is of my opinion that these concepts are more important to a player than how fast they can move their fingers.