From what I can gather, they're banned from online because of the possibility that players would use Miis designed in a way to antagonize other users, i.e. making a Mii with a dick for a face.

In which case, I bring up the question: if Nintendo's so concerned about people using Hitler Miis and whatnot online, why not just have an optional "safe mode" that automatically makes all opponent Miis look like the ones used in official artwork?

That Mii Chrom face tho.