The problem I have with Dan is the whole purpose of his creation was for Capcom to take a shot at SNK. Funny as it was sometimes (Like Dan's Art of fighting ending in the vs. game) that is as far as it goes. All Dan is doing is hogging up character space.
True. Unlike that shameless Yuri-clone Sakura, he isn't very useful in a fight, just as a joke character, and probably shouldn't be in a cross-over title with SNK of all things. If they have Ryo and are doing a crossover with SNK, just don't use him or make him play like a somewhat serious and unique character.
Although I don't think he's taking up much space.
I must be the only one who really likes playing as Dan.