I have two arceus but I cannot put in wifi battles.i think Pokemon should make this work.
Im pretty sure they don't allow certain pokemon in general. Almost all legendaries cant be used (not just arceus) because they are too powerful and everyone would use them if they could and it would get boring. The idea with legendaries is to use them in private matches with friends etc. :) if you want to use it/them you will need to have a battle with someone you know. try exchanging friend codes in chat with people