Sorry that I'm late to the party, just had a bit of input. In response to this: most challenges have a rule that says something along the lines of "you may hack in a low leveled Pokemon to start the game with." or something along those lines. A lot of people think along the lines of "Ponyta is my favorite Pokemon, I wonder what the game would be like if I started with one?" People, myself included, do not hack other Pokemon into the Elite Four, nor do they redo trainers, and put in cities.
As for hacking in newer generations of Pokemon, in my 2+ years at Pokecommunity, and probably about 1,250 posts in the challenge forum, I have yet to see someone hack in a newer generation of Pokemon into an older game for a challenge. I'm not saying it can't be done, I'm saying that nobody has ever done that, and personally I doubt they would. You're right when you say that there are plenty of Pokemon in the current generation. However, I, for example, did nothing wrong in putting a Snorlax in early in the game. He is a Snorlax. Putting in a code to get a Snorlax early in the game does not change Pokemon to look and behave like a Snorlax, it simply changes the data to say "yes, there are Snorlaxes found on this route and they are found 100% of the time in the wild.
Yes, what we are doing is hacking. However, for the purpose of this challenge, the hacking that we are doing should not be considered wrong. And this is the only hacking that people ever do for challenges. If this challenge was a speed run or something, then putting in low level Pokemon of your choice should and would be illegal. However, all that should matter in your challenge is that the trainer obtained a Sandslash, regardless of where, and he trained it completely legally, and taught it completely legal moves. This Sandslash grew strong enough to defeat the Elite Four by itself.