Pikachu can't be in Little Cup, since Pichu is the first stage in the evolution line.
Also, I doubt the Z-Crystal factor matters much, first of all, 10 million volt Thunderbolt can only be used by the Hardy natured Cap Pikachu. And there's also the fact that Light Ball + a regular Volt Tackle gives more power than Catastropika (granted, Catastropika doesn't do recoil, but that hardly matters).
Oh, right. Is there a special battling format for the Middle Evo Pokemon?
Well Hardy is neutral so it's not like they gave it a Adamant or Jolly nature, it just doesn't pack as much of a punch had it a positive nature to increase Special Attack (though it would be in the same boat had someone gone for a positive Speed nature).
But yeah, I'm not saying Pikachu is good. I'm just saying there's reasons a player would at least try out Pikachu.