I don't think that's true - the quality output on handhelds seemed to diminised as well post PS2 era.Imo quality Japanese gaming never really left. They just focused mostly on handhelds rather than home consoles for the past ten years or so.
The last Nintendo handheld I genuinely enjoyed was the GBA.
I still can't think of many games I enjoyed on the 3DS, but I'm glad the Vita is still receiving support in 2017.