lets take the best of the both.
Sonic - Hyper Sonic. why did the programmers make him too good... oh yeah, you get Hyper Sonic when you get the Super Sonic and then play Sonic 3 AND Knuckles, and collect all those bigger emeralds. it's the best Sonic can do. and you get to see the special ending... all good
Mario - Get him a pair of powerwings and a star. now he can fly forever and ever, and he's got a star so only thing that can kill him is if he drowns or falls into a void. which i doubt would happen. and Mario can throw stuff too. fireballs too. hmm...
so after a *cough*detailed*cough* analysis, i conclude that they'll both die from falling in a void, after colloliding infinitely to each other, unable to damage one another. even if that'll take eternity, because both can fly forever. but in this case, since i doubt Mario can have continuous access to a star, he'll most likely fall to his doom first. then again, because he takes no damage from falls, it'll be all good. he'll probably go camping in a pipe, and throw fireballs randomly. who knows, maybe Sonic will get hit once...