So since the Sonic 3 Movie came out recently, it reminded me that we'll probably get a Mario Movie Sequel and fans seem to agree that Wario will probably be in it. Most people I've seen wants him to be the main antagonist with Waluigi but I don't if that would work. Maybe I'd prefer if Wario was more of a rival to Mario, while the main antagonist being someone else.
Honestly, I want them to handle Wario the way you said here. Make him a rival rather than a main villain, and have him maybe learn to respect Mario more at the end after the actual villain puts both of their lives in danger.