Having had a lot more time to think MHW through, I think it makes more sense if you consider when the project was greenlit, around 2013 or 2014.
The Western dedicated handheld market was clearly in decline, and MH4 hadn't even launched outside Japan, so it wasn't clear how much longer the series would be viable on 3DS in the West. PS4 hadn't launched or had only just launched in Japan, so it wasn't clear how badly it would founder there. NX hadn't even been talked about, and it wasn't clear at the time whether it would be successful or how easily it would fit into the PS4/XB1/PC development ecosystem (and to be frank, the latter still isn't entirely clear).
I don't think it was the smartest possible move and I strongly doubt MHW will meet Capcom's sales expectations, but I think it's at least somewhat understandable without the benefit of hindsight.
If MHW meets their expectations, the MHW series will continue. If it doesn't, they'll probably just bring future Switch releases multiplatform. Either way, the franchise will continue on Switch in some form.
Not localizing MHXX really would be indefensible, though, and people are right to be upset about it.