I definitely think sprite animation has a place on Newgrounds. But I also do realize that the medium's current state is more calm than how it was back in the day. This post actually made me try and think more about why that is...
As a side-note: don't worry, I want to end this post on a high note!
Back to it...
I think the initial boom is due in part by Randy Solem, God rest his soul. I remember Rise of the Mushroom Kingdom as one of the coolest things. He was an early pioneer of sprite movies. There was even a bit on Attack of the Show, a cable TV program, where Solem was interviewed and talked about his sprite stuff. I can't listen to it now as I type this but I'm sure he provides more context:
Then I think a Pandora's Box opened up where people realized that you could use these pixel-art video-game graphics to make your own movies. There was also an element of novelty to it, something about having these fun video game sprites be in these weird, violent, and sometimes crude movies. I for one enjoyed them a lot. I remember rotting my brain after school with stuff like Power Star, Bowser's Kingdom, and even the countless "Super Mario Bros. Bloopers". Hell, some of the first animations I made were on a flash mario-movie-maker type game. You could probably guess what franchise I mostly consumed back in the day. Perhaps the novelty wore off on many after so long and thats why one may not see as many sprite movies as they did back then. SMBZ had a great impact too, and I still see it in a lot of the sprite series I see on the portal even today. I feel bad for the lull in popularity because a lot of that stuff is technically impressive! In the background these current guys may as well have perfected the art, we're talking sprite-sakuga!
I don't want to say there isn't a place anymore for the Mario, Smash, and etc. content these days. Though, 20 years from when this sprite movie stuff began is a long time, truth be told. These types of sprite movies can still be made, and I certainly won't think less of one for going through that route! I think it would be fun as hell. But, if the sprite medium does bounce back I think it be from more original content, which you do make, so my compliments.
I'd definitely welcome another boom of the medium with open arms, these movies have the potential to be awesome and hilarious.
I also remember Dorkly was a thing. They were funny. Do with this image what you will.