"To put at least one question to rest, unfortunately Rival Schools will not be making an appearance," says Capcom's Chris Svensson. "There are IP clearances and rights we no longer have (particularly pertaining to voicework/soundtrack I believe) so our IP management group has told us it can't be re-released. I'm sorry as it's one of the ones I really wanted to see be put back up
Emphasis added. The issue is not with with a specific character design. It appears to be with audio assets on the PS1 disk, thus precluding it from being rereleased. This does NOT mean that Capcom will never make another Rival Schools game, or be forced to remove a character from Rival Schools (but their voice would have to be redone).
You can't like TF2 and not like Nerf Now.