Surprised you think this after owning both. Even if the Switch was 20% more powerful (ha!) it would still be less valuable IMO due to the Deck being an open platform and Steam with its sales and backward/forward compatibility.
The Deck, which is my main console at the moment still does not have the Nintendo stable and it has terrible battery life. For me, thats not a big deal since I always have a 30,000Mah battery in the car or close so I can get 10 hours out of the Deck but if I was just starting out and never played either, the Switch Oled is the more compelling device even if AAA games don't play or look as nice. Doom Eternal on the SW.OLED is close enough that it doesn't hamper my experience even after playing on console and Deck.
A custom 7nm Nvidia SoC that supports DLSS (as the Deck utilizes FSR) and comes anywhere close to the power and capabilities of the AMD APU in the Deck would be very expensive. I'm not really sold on the joycons being that expensive to fabricate either. Besides, the Steam Deck also has more expensive components such as the track pads, dual mics, faster storage controller and drives, more and faster RAM, USB-C controller and a capable bus for it, modern wifi networking, etc.
Now that I've typed all that out I'd be afraid to see the price of a Switch that actually compares to the Deck given Nintendo's preference of selling hardware for a profit day one. A $400 Switch wouldn't be anything like the $400 option of the Deck. I can already imagine how many corners they'd cut to earn a profit at $400 using a Nvidia SoC.
The primary components in Switch are fairly cheap as seen by the MSRP of the Switch Lite. What I am saying is according to reports, the OLED switch cost $267 to make ( a $10 increase over the previous version) The dock and the Joycons are what drive the MSRP of the Switch to 299 retail price. They are nice additions but they are superfluous in terms of graphic visual production (FYI you don't need the dock to output visuals to the tv, that is done in the Switch internals).
Now imagine if Nintendo decided to sell the Dock as an optional device and went with a similar price point of $399. Removed the neat but over-engineered haptics from the Joycons and went with a Switch Lite formfactor but with the 7"OLED screen. Even if they wanted to keep the profit margins of $40 per unit for the OG Switch (They make $80 on every Switch Oled sold at $349) that means they could add a theoretical $150 per unit and spend that on the RAM and SOC and still hit $399 and make money on each unit sold. I think Nvidia is up to that task. And that is just for handheld mode. The amount of rope they have to make improvement to the docked experience with USB 3.2 /4.0 finally reaching a speed to make an Enhanced Dock feasible I think it is well within margin to expect Nintendo to reach this peak.
If history serves as prophets, every Nintendo Follow-up console is a refined experience based on the previous Gen
"Switch Advance" wont try to reinvent the wheel, it will just put better tires and tread on the current one.