Or, you know, they realized their console would definitely crash and burn if they had to charge another $50 - $100 for it in this marketplace.
Yes, the better option is to make it slightly more powerful than their console that failed largely due to being underpowered when their competitors are coming out with upgraded, more powerful versions of their flagship consoles, leading to performance issues at 900p in their very own keystone launch title (BoTW), with no online service at launch, no ability to transfer saves, and no multimedia or web browsing functionality whatsoever, and continuing to use archaic friend codes.
Meanwhile, PS4 Pro promises 1440p-4K gaming at 30fps and smooth 1080p/60FPS on much more graphically demanding titles, launching Boost Mode to enhance non-patched games, all this whilst Microsoft is gearing up for Scorpio. Nintendo is leaning HARD on the handheld angle while reassuring the public the Switch is primarily a home console and not a successor to the 3DS, yet it's very clearly not going to be powerful enough to have proper third party support from major publishers. Even Jeff Kaplan has said getting Overwatch on the Switch would be "a challenge", and Overwatch can run on a PC with the power equivalence of a potato.
I have been watching Nintendo dig their grave since the WiiU launch -- and I was there with a WiiU ON DAY 1. I watched as, for 4 years, Nintendo continued to fumble with every next milestone that was supposed to "turn the WiiU around", but didn't. I sat around while Zelda got delayed two years only to be released simultaneously on Switch. And now I'm sitting here with a Switch watching Nintendo making the same fundamental mistake of underpowering their system and alienating developers all over again. Pretty much close to done with being an apologist for this bullshit -- there's no excuse for this in 2017 and Nintendo is being fucking myopic. Everything about the Switch screams "rushed", and if you can't see it then, well, I won't be able to see it for you.