Frankly, I don't think they do. Certainly people have frequently been baffled by decisions they make with Smash Brothers in balance patches and the like, and they've never displayed more than a passing willingness to even acknowledge the competitive scenes of Smash games - getting them to even allow the games to be played at big tournaments like Evo has been a challenge at times.
The problem someone with your opinion has is the simple fact that any game with multiplayer that isn't strictly co-op will, by nature, be competitive. The only way it won't attract players who enjoy that competition is if the game is bad and such players simply don't want to play it.