Well I think there are several things that go on.

First I do believe that there is some favoritism going on with the creators of the game. For instance Scorpion is guaranteed to be in every game not so much because of his popularity but because he is a favorite of the team.

Second I believe that some characters are left out because they don't fit in with the plot. Shoehorning certain characters into a game where they don't fit makes them feel out of place. Which is why hardly any of the post MK3 characters made it into MK2011.

And I don't think the creators just make characters at random for the next game. I'm sure you've imagined some kind of fictional character before. There is a lot of effort and imagination creating new characters, and I feel that only characters that have been well thought out actually make it into the games....usually.

And finally this thread would probably be better placed in the Future MK games discussion section.