And then it hit me.
One day I was searching the net for a Strawberry Shortcake Atari game (don't ask why) when I came across a photo of the villain of the game: Purple Pie Man. And that was it. Purple Pie Man and Waluigi are the same person, which prompted me to come to the following conclusion: After years of unsuccessful assassination attempts on Strawberry Shortcake's life, Purple Pie Man retired from that scene and moved on to bigger fish-- the world of Super Mario Bros. Once there, he altered his appearance a bit (trading in his pink chef hat for a purple plumber's cap and his cooking apron for a pair of overalls) and took on the new task of becoming archrival to Luigi. His career is now once again safe, fore he has become quite [in]famous.

Notice the similarities: the creepy elongated face, the bowed legs, and the affinity for elf shoes and the color purple. Thanks to whoever made this nice visual display.