I think what people are forgetting is that Diego was made for the western audience and NiCO was made for the Asian audience. I vaguely remember them stating this back when Diego was released.
I dont know what could possibly give you the impression that anyone has forgotten when she has mostly been discussed in terms of weaboo, waifu, loli and so on.
Anyway I was also a lil underwhelmed with Diego's design, because we already have the street brawler territory covered with Rig. But it is a DOA tradition to make complimentary pairs, (Kasayane, Lisa + Tina, Ryu + Hayate, Helena + Christie). Now rig has his Diego. It's just unfortunate that they named the character Diego and didnt play up any Latin American references. It would have been cool if they added a Tony Montana like character in the game. This guy isn't super memorable.
At this point I'm ready for DOA to put out their inevitable ultimate edition and make it their last release. The franchise has been watered down so much a reboot is necessary. Virtua Fighter 6 can pick up the slack in the meantime.