I guess I'm having trouble seeing how the return on investment is higher for a miniature piece of hardware with limited access to classic games that costs money to manufacture, distribute, and stock at retail. Whatever cut they end up with dries up as soon as the console sells out, which won't take long when it's only being manufactured for a few months.
The access is not as limited as you think. Only Switch owners can access Switch VC. That's a $300 entry point. And then you have to wonder how many of those people will actually buy several VC games, let alone many. Each sale is only a few bucks each. And I would bet many Wii and Wii U owners who used the VC only bought a handful of games, or even just one old favorite. Assuming they've learned their lesson and make enough supply, anyone can get a Classic mini at retail or online. And yes, it will dry up. And then they will make other models and still other models.
I find it especially unlikely that potential lifetime sales for virtual console titles on the Switch, which almost assuredly cost considerably less per title to plop onto the Switch and distribute digitally, would be eclipsed by these classic systems. Nintendo could even keep the pricing structure similar to Wii U and 3DS. $5 for NES (and GB/GBC?), $8 for SNES and GBA, $10 for N64, and even toss GameCube games on there for $15 or $20.
That's a few bucks a pop. Even with the associated costs, the Classic minis net Nintendo several tens of dollars each. And with somewhat limited availability due to them making one each holiday season, they can nearly guarantee they'll sell whatever they make, at least for a few seasons until the novelty wears off.
Nintendo's catalogue of older titles is so massive that the free one month rental (for which I've only seen confirmation of NES titles right now...might have read SNES somewhere though) couldn't possibly substitute access to games a la carte. Plus the sub is required for online, which people will be willing to pay at $20 per year anyway just to play Splatoon or Smash online.
By no means am I trying to be rude here, but I just don't see how withholding VC in favor of limited edition consoles and a $1.67 per month subscription makes any financial sense.
They do have a massive catalog. And they've also had it all online on a VC for a decade now. They are likely looking at new ways of leveraging this content. There was a question at the shareholder meeting yesterday about legacy content and Miyamoto alluded to hardware/physical as an attractive option. The question was about GBA VC. I think we can reasonably expect GameBoy and GBA Classics in the coming years.
One other option might be physical collections of franchises with special edition extras like Amiibos, all for much higher prices than the typical retail game. And then digital bundles of those games on the Switch E-shop. Again, more money per sale.
They are trying new things right now. They are sitting on a trillion yen in cash. They don't have to be all things to all people. They are doing things that get them the most ROI for every action they take.