There's no denying the fact that Vinoo Mankad was an excellent all-rounder.
Having said that, our country has produced a superlative all-rounder named Kapil Dev. I'm sure you wouldn't want 6 bowlers in a test team. So, sacrificing either Sehwag or Laxman/Vishwanath for Mankad (who was a lesser batsman, undoubtedly) doesn't make much sense. The only other alternative is playing only 3 specialist bowlers (Srinath/Nissar, Zaheer/Amar Singh, Kumble/Bedi/Gupte/Chandra/Prasanna) and 2 all-rounders Kapil and Mankad. This is certainly a better idea, but since bowling of an all-time India XI is a much weaker discipline than batting, I'd rather go with 2 specialist spinners dropping Mankad.
All I'm saying is that one could choose Mankad in the team, but he's not the one who 'walks in' the XI. The only players who should 'walk in' an all-time India XI are Tendulkar, Kapil, Gavaskar, Dravid and probably Sehwag. Other places will depend on individual choices, team composition etc.