Sonic is fast, but not strong. Mario could wet the area around him with FLUDD and that would really slow down Sonic. He may be sure-footed, but at that speed, I don't think Sonic could use his full speed. Then, there's the Invisible Cap.

Mario slowed Sonic, made himself invisible to Sonic and then he could either: 1) nail him with Fireball or 2) slam the punk to the ground. Hell, grab him, fly up and plunge back to the ground, making a hedgehog pie.