Just complementing what PsiPhi is saying.
At least how i see it, the arcade version is pretty much what the designers intended for competitive play.
The console version has a lot of extra fluff and features in order to increase the replay value for people who are playing on their own without having other people to play.
I mean, fighting games really arent that much fun without other people, and you can only beat arcade mode so many times with each character before it gets boring.
So the designers add stuff to the console version for "at home" playing. They dont really add it in with the intention of balancing it for competitive play, so nobody really knows if it is balanced or not.
It is arguable and ambiguous to what technically is allowed in tournaments. Since people have to draw the line somewhere with what is allowed in tournaments and what isn't, and to avoid ambiguity and controversy, it is just easier to draw the line at what was released in the arcades.
