It happens in mma and wrestling games,so why is it unrealisticly for fighting games?
Because it takes much more time when a game is made from scratch than it does when they just port over characters from past games. The more characters that are already in the game, the longer it takes to add another one. Development time grows exponentially the more characters are added, not linearly. They have to program each character to interact with every existing character and repeat that process every time they introduce someone.
If you look at any other fighting game that had a starting roster with at least 40 characters, you'd see that the majority of them were just ported over from previous games. In MK Armageddon, the majority of the characters were just ported over from Deadly Alliance and Deception. In Marvel vs Capcom 2, only 9 out of the 56 characters had new sprites. The rest were just ported over from the previous Capcom vs games as well as from the Street Fighter Alpha and Darkstalkers games.
In Street Fighter X Tekken, the majority of the SF cast was taken from SSF4. The only new SFers that actually had new models were Rolento, Hugo, Poison and Elena. Capcom vs SNK 2 had 48 characters and most of them were just ported over from the first game which had almost half the roster ported from the Street Fighter Alpha series and one Darkstalkers character.
The King Of Fighters series has always had a huge roster of characters, but when they decided to go with a different art style, they had to make every single character from scratch. Because of the new art style, KOF12 only had 20 characters, which is the smallest roster in the history of the series, even smaller than the first game. KOF13 had around 30 something because they ported the previous characters over (they also did some palette swapping to increase the roster a lot quicker).