This has never been true in this industry.
I get what you're saying, but you're a little late here my friend. I bet your argument is based on the performance of the Wii and you're right, but times have changed. Those people play on their phones and maybe buy a PS4 and that's it.
The mainstream audience will see a PS4 ad for Red Dead, that's what they'll buy the game for. Most of us, people on GAF, will get the best version. Some people would get the Switch version, sure.
R* is the market for R* games?? Interesting theory.
He clearly means they should let the Switch owners decide. Which I agree is a nice idea, but it is not up to R* alone to take that risk. Nintendo would have to either publish/pay for promotions or something as an incentive for the Rockstar - or any other estranged 3rd party publisher - to take a gamble. It's up to Nintendo to extend the olive branch at this point.
"The market" consists of consumers and producers. R* is a producer. If they don't believe there's enoughgh demand for their goods they won't supply them. That's "the market". What you're suggesting is unrealistic. If the costs of producing a good was zero, completely free, than sure. Let "the market", in that case only the consumers, decide whether they want to buy said good or not.
Your olive branch suggestion is interesting, but I don't think Nintendo has a lot of interest in that. That's not really what they do.