The problem with FE is that most of the likely characters i.e. the lords of their respective games are all similar. Mostly blue haired swordsmen. Honestly differentiating them enough I feel like it would be somewhat difficult.
Marth, Sigurd, Seliph, Alm, Ike, Roy, Eliwood, Leif, Lyn, Chrom, Lucina. All of these are sword wielding lords. Yeah most of them have some other special characteristics, but I feel like even then it's not enough to completely differentiate them and give a completely unique moveset for the characters. They could always start using things from other noteworthy characters or some other mechanics from the games like warp powder or such, but I don't know.
I love FE and I feel like it should have 3 maybe 4 reps at most. Marth will always be there, and so will be the most recent lord. The other(s) really depends on popularity I guess. Even with lords that might bring a few more unique things like Hector, Micaiah, Ephraim. Those characters are either from old games or just not popular enough to actually become playable.