Not AS good, but it's not a bad matchup for Mario. Pretty close to even if not exactly. Cape is a decent defense against his nanners, especially when he uses them OOS. His fast SH aerials are really good for picking them up as they're being thrown or when they're already on the ground, Mario KO's a little earlier, and he's got a ton of options offstage vs Diddy.
Like any character vs Diddy though, if you don't know the matchup you'll undoubtedly lose.
Edit @ Scorptile: To my knowledge, DK can't protect himself very well offstage. UpB is his main offense and defense.
Ness at least has a few options. If he's forced to use his upB constantly, then you're right. That's generally not the case though.