Here's a detailed explanation:
Right now the game is only ~46mb. Mario's sprites are worth ~6mb. If I add fire Mario, I have to duplicate every sprite(over 100), change the colors, and change the code to support different color palettes. That's 13mb for one character. Assuming everyone else's sprites are also worth 6mb and they each have one transformation, that means the game will now take over 100mb by the time I finish the characters already in the game.
TL;DR, I have to duplicate everything, basically doubling the file size of the game from ~46mb to ~92mb.
You're probably right about the file size eventually being massive either way, tho