An SV's view:
1. For many people who go to worship a God, the God requires to be proactive. The expectation is that God will answer the prayers, queries and pleadings etc., readily participate in a business deal (sauda) where what he is expected to give to the devotee is larger than what the devotee will give Him, or He has to somehow show that He really exists by at least giving them "vibrations". My friend says he gets the vibrations in certain temples and does not get it in other temples. So, for him God exists only if He gives him the vibrations.
2. Automatically the next stage in the spiritual journey is one in which any one who gives vibrations, who does miracles or whose darshan solves personal problems has to be elevated to the rarified status of a God. Even people who do not get vibrations etc in the presence of deities in the temple get these vibrations in the presence of some individuals who are called by various names such as Baba, Swamiji, mahantji etc., etc., The reason is not far to seek. Unfortunately these babas, swamis etc., are all just human beings with a certain achievements which we will see in some detail below. But being ordinary human beings they have their pluses and minuses.
3. These swamijis, babas etc are souls who are called in our religious literature as sidhdha purushas. They have achieved by continuous and strenuous efforts (called tapas) abilities which are called Ashta sidhdhi. These include the ability to travel back and forth in time, walk on water, be present in different points in space at the same time, getting lighter than air etc., etc., The people mentioned in 1 above when they visit such sidhdha purushas they get the vibrations, they see miracle happening, and their future and past told precisely etc., Thus a sidhdha purusha may ask one of his devotess "Hey why did you fight with that Chaiwallah for giving you less sugar in your tea when you started from your home town?" and our friend will feel floored. The sidhdha purusha becomes a God from that moment. Many such things can be done by those who have attained the ashta sidhdhies. In all this the fact that the sidhdha purusha himself, knowing fully that his visitor will be thoroughly impressed, goes about this kind of an ego trip. To that extent he is no where near becoming a God. What is the need to materialise a mango or a small statuette from the thin air, or what is the need to ask a devotee what he did in his home that day morning? The truth is that the sidhdha purusha himself needs to impress the visitor/his sishyas and so does all this as a trick without saying so. In an Abrahamic religion like Christianity, such people (sidhdha purushas) are recognized as saints only posthumously and that is somewhat better than Hinduism in which the babas are many and they are alive and furiously kicking too.
4. Coming to Shirdi Baba, he is one of those sidhdha purushas. He did many miracles during his lifetime and after and perhaps his devotees are impressed by that. They were calling him a baba so far and now they want to make him the God. The Shankaracharya taking up the issue has no locus standi because he is no different from the sai bhaktas as he and his followers also believe in calling a sidhdhapurusha a God or a God's incarnation. The only difference is that Shirdi baba was born a muslim whereas the umpteen sidhdha purushas that Shankaracharya's followers worship as God's incarnation are Hindus. Attaining the sidhdhi is possible for any human being whether a muslim, a hindu or a christian (a la The Mother of Pondichery).
5. For every known sidhdha purusha there are a hundred other sidhdha purushas who just do not bother to reveal their sidhdhis to the world. Go to Himalayas and you can find many such evolved souls. The most important characteristic of them is that they have no ego at all and so no need to tickle it by performing miracles before their sishyas. They lead a quiet life.
6. SV Acharyas, many of them, are indeed sidhdha purushas (they also do a lot of tapas and achieve siddhies) who make it a point not to show off their powers of sidhdhi and they condemn it as a dangerous diversion in their path to salvation. They believe it is a dangerous, enticing and digressive soliloquy in an otherwise crisp, beautiful and purposeful narrative called pious life. They advise their sishyas strongly to avoid going after such sidhdhies. For them the ego has to be completely subordinated so that they remain steadfast in their belief in God.
7. It would be good for Shankaracharya and for Hinduism if he drops his plans of agitation because a kettle cannot call a pot black. If it is politics that he is playing, the course of events will be decided by other factors.