The only way I see Wily working is if he has some teleporter device, and his moves are made up of previous Megaman villains. Like you do a quarter forward hadoken type motion and Wily's character pushes a button and instantly Cutman appears and launches a straight forward cutter. Or you do an uppercut motion and Gutsman appears and uppercuts. You do a backwards half circle and Woodman appeards and shields Wily, or something like that. Then his supermove could be coming out in one of those wacky, huge end game ships he uses.
...however, I agree, I think he's a wasted space. I'd rather see him as DLC or in a future version of the game. With space limited and several ppl already revealed, I'd rather not have one of the remaining slots go to him. If we had MVC 2's staggering amount of characters, sure, but considering Capcom is doing all of the sprites fresh, I doubt we'll see half that many.
Since ppl were putting their lists up of who they want to see in it, I'm going to assume 24 characters (20, with 4 unlockable maybe....just what I'm going with, lol). Tho 20 is more likely, anyway -
Marvel -
Captain America
Spiderman
Wolverine
Hulk
Ironman
Deadpool
Thor
Nova
Silver Sufer
Super Skrull
Thanos
Doom
Capcom -
Ryu
Chun-li
Guile
Chris Redfield
Megaman X
Zero
Dante
Morrigan
Viewtiful Joe
Donovan
Akuma
Demitri
Boss
Galactus
I'd like to see what little story there is being Galactus threatening the Capcom universe, and Marvel getting pulled in to help stop him. The actual boss battle could be a mesh of previous MVC boss battles. Instead of Cyber Akuma, we get a herald Akuma. Galactus infuses him with power, and he's the first part of the last boss fight. The second half being somewhat like Apocalypse, in that we fight a huge upper torso of Galactus.
I wanted to put in Spiderwoman to cover that Rogue spot of 'a hot Marvel woman', but I'm not sure she'd be interesting enough fighting wise. I also left out Magneto, that was painful

. I put in Donovan and Demitri because Darkstalkers needs more love. I also know I skimped on the wacky characters, but it's tough with limited space like that

.