Characters aren't all that fleshed out in MK to begin with. Honestly, these characters are very shallow and I think it's silly to hate on one in particular for not having much of a story.
I think that's one of the goals of this new game, to give each character a more fleshed out story, make them make more sense, and to generally provide a better understanding of the MK canon. I agree with your argument that any character can work if you give them a good story and design to back them up. But that literally applies to any character, and there are plenty more interesting out there than Chameleon. He simply doesn't have very much potential.
For one thing, you'd have to give him a whole new moveset to make him viable and unique. As it is now, he's just a cycling of the ninja-swaps. Now all the ninjas have unique designs, so you can't just shift the hue. Plus, now that everything is more solid story-wise, and they're trying to have more concrete logic with each character's powers, I honestly don't understand why he can use all the ninjas powers, and why he can't pick one to copy, and has to cycle through their abilities in a set order. There's no common thread between the ninjas, and their powers all have different sources.
All that said, I'm open to a version of Chameleon that works, but between design and moveset, he'd basically be a brand new character. Again, that's fine, but personally, there are plenty more post-UMK3 characters that I think would be more interesting.
Maybe this is just stemming from a desire to see more mouths.
