True SF is strong and can promote the games, but you encounter a couple of issues.
Let’s use DarkStaklers for this example.
Let’s say the last character is Jon Talbain. You now have to explain how there are werewolves in the SF universe and his history. He has ancestry hailing from the Maki kingdom.
Combining the two universes dilutes both identities. To give SFers a chance you either radically amp up their abilities or dampen the DS ones. You then have clashing aesthetics, the cartoonish over the top violence (getting chopped in half and reknitting, etc) of DS doesn’t work with SF, and cutting that out would be a shame, also the gothic chic mixing with the brick and urban look of SF doesn’t work. You then have Darkstalkers characters not playing as DS characters and having to conform to Street Fighter’s mechanics. With a full on DS game, you can have unique mechanics that go 110% with the concept of horror media monsters and just giving the audience a taste of something NOT SF. SF has been Capcom’s main fighting squeeze and while popular, people want a taste of something different.
You then also have to change the setting of Darkstalkers entirely. Darkstalkers aren’t the things of rumours and stories, they’re out there in the open with the UN literally fighting to give Cat Women human rights, the rich hiring Dark Hunters to capture DS for potions, medicines or collections, you also have low level and medium DS’s strong enough to wipe out armies. You can’t just say they’ve always been in the background of SF.
One other issue is that you mess with the universe’s expectations. People will want more DS characters and not be satisfied with 1 or 2, then you have every season’s character requests being bundled with a SF or DS request. Also, people already hate the “freaks”, so including DS in the mix will amp that up and take the series further from martial arts or even martial arts with anime/toku-esque evil organizations and sci-fi. We’ll then get an issue of “who cares about this next martial artist style” when you can have a Yokai tank a hadouken and eat Dan and have some crazy over-the-top design and moves.
Getting eyes on the series again through the nostalgia costumes is nice but, DS fans are desperately waiting for a new entry, you don’t have to combine universes messily to get people excited. You’ve got the old DS fans, but also, with enough presentation and just being a brand new fighter, you’ll get new eyes on the game if it’s pushed.