Putting it on the 3DS in the first place was extremely illogical. The series has already gone multiplatform. The damage on the franchise and declining in overall sales that you suggest would already be taking place with MH3G.
Err... whut? 3DS is a brand new platform. Monster Hunter is transferring to a new system because
the generation is over and they need to start moving to the fanbase to one of the systems that's still being supported.
Seriously, I don't understand why people think this is even a point:
Capcom went from selling another 4+ million copies of a "MHP3G" on PSP to hoping to sell 2 million copies of MH3G on 3DS.
Because the goal is to migrate the fanbase so they'll all be in place for MH4 (which will release at a time when the PSP will be in decline.) The entire reason it's Tri G instead of MH4 (or even MHP3G) right off the bat is to build up a fanbase with something besides the biggest event (i.e. new main numbered release), the same way SE does with DQ spinoffs at the start of a new gen.
Of course there were Nintendo's moneyhatz in play
Capcom seems to have approached Nintendo, not the other way around. There are no "lost sales" here, only an investment in the franchise's future.
Sony absolutely, positively NEEDS to moneyhat a huge Japanese franchise as they have none right now for Vita.
Moneyhats aren't magic (as Microsoft certainly discovered in trying to deal with the Japanese market.) They can't really convince third-parties to do things they never would do otherwise; mostly they work to tip publishers over from considering something to committing to it.
There is literally no franchise up for the taking in Japan that Sony can acquire for Vita just by paying out cash -- that's exactly the problem they have to overcome with the system, and something many of us were pointing out would be challenging even before the Vita announcement. Monster Hunter is pretty well situated now. FF entries will come but the mainline games will always stay on consoles. DQ is 100% locked up on Nintendo systems for now. KH could do a Vita project but not anytime soon. What else is even out there, that already exists, that would be
on its own a major selling point for the system?
(This is why I've been saying Sony needs to focus on getting a
lot of niche development by aggressively targeting smaller devs and pubs -- they have a much better chance of making the system desirable through diversity of library than through having big, must-have exclusives.)
You talk about 'damaging the series', yet you have no issue with capcom moving the portable version to an entirely new platform? You don't think vita would have made the most sense from a continuity pov?
Continuity is really kind of irrelevant. At the time they announced this, nobody even owned a Vita yet -- so there was no audience of people getting "burned" because they "expected" MH to be a Vita-exclusive franchise -- and everyone who wants to play the latest MH needs to buy a brand-new system either way. Capcom's brand is more relevant to people than what previous console(s) they own in making a buying decision, so they really had a huge amount of leeway to pick either handheld system (as best fit their other business reasoning) and rebuild the audience there.