I've heard plenty of people call it Sness, more than S.N.E.S. personally.
As to GIF, a hard G makes far more sense to me as A) it's not in any way related to peanut butter, B) the actual word it's drawn from uses a hard G, and C) because that's how all the designers I knew growing up pronounced it. I could care less what the creator of the damn format has to say on that point.
Sness just sounds weird to be. Reminds my of Ness from Earthbound.
Skippy is a better peanut butter brand anyways.