The game is not designed for ring outs, the only way they could get those in the game would be totally ripping off the percentage system of Super Smash Bros. That said, they should totally make a health mode, it wouldn't be that hard considering they already have the % of damage of every attack. Supers could stay, but wouldn't be instant death except level 3. For example, Dante's level 1 does 50 damage.
Ring outs were 90% responsible of the fun in SSB. That's one of the reason that game is a much better party game than this, which is more of an unbalanced version of a Street Fighter kind of fighter with 4 players.
I don't think Ring Outs are a good idea, Because for example on a stage like Alden's Tower, some characters can make you have Ring Outs. Cole can freeze you, Evil Cole can use that black tar, Sackboy can use his electric jump pad etc.
Kingdom Hearts FTW!
Moveset ideas:Ty the Tasmanian Tiger-http://community.us.playstation.com/t5/PlayStation-All-Stars-Battle/Ty-the-Tasmanian-Tiger-moveset/m-p/39916477