"Cheap" is a word that has been used to complain about almost any aspect of a game. Because of this, it has no clear meaning. Some uses of the word include:
One example of a strategy some players consider "cheap" is Kirbycide, specifically Swallowcide, where the Kirby player is not considered to be fighting and can produce a KO more easily than with many other techniques because some characters have few ways of approaching Kirby without the risk of getting swallowed.
As the concept of "cheapness" is subjective, there are generally no rules for banning something in tournament play on the basis of it being cheap. If a character/tactic/move is truly strong enough to be banned, it is typically regarded as being broken or significantly detracting instead of cheap.
The Cheap Shot bonus in Smash 64 is awarded for overusing a single move, an action that is commonly regarded as cheap. The Cheap KO bonus in Melee is rewarded for KOing an opponent from behind, which has virtually no gameplay effect.