You are like me, in the fact that I don't believe it would be a bad move for Nintendo to have released a more traditional console, with an ordinary controller and a more budget-friendly price. In addition, your idea of putting their nostalgia front and center could very well work for them. The high demand for the NES Classic proves that folks are still big on Nintendo's classic catalog. Why *not* push it a little more?
The thing is, though, regardless of whether it's a good move or not, it's pretty obvious by now that the old Nintendo isn't coming back. The new Nintendo, the one we have now, is absolutely hell-bent on delivering hardware that enables exclusive experiences, the kind that are not possible on any other hardware. The new Nintendo is the Nintendo that says "a new F-Zero? We don't see the point. What new thing could we do with it?" The new Nintendo is absolutely unable to understand that numerous fans would be very happy just having a new version of F-Zero X or GX with updated graphics and online play.
Some folks probably believe that this is a good thing. After all, it's this sort of thinking that brought us the Wii. And the Wii was great! Underpowered, sure, and I still think it's a shame that Super Mario Galaxy is not in HD (outside of emulators), but its easy-to-use, instantly-understandable interface changed gaming forever.
For better or worse, Switch represents Nintendo's continued, strong commitment to this philosophy. In my eyes, the fact that the package is what it is, the fact that it's $300 with no pack-in, and the fact that the launch lineup is thin, all basically says this:
"Hi. We are Nintendo. We have continued our trend of hardware innovation. We believe that our product is worth more than those of our competitors, and we have priced it accordingly. Developers, we are asking you again to please create software for us, but also to consider our innovations while creating games for Switch, and to take advantage of those innovations. Gamers, we are asking you again to accept that we won't have the fanciest graphics, or the lowest prices, or the most popular 3rd-party games, or the promise of backwards compatibility in the future because of our hardware's unique nature...but in return, we will give you Nintendo software."
For some people, this is a good enough trade, and they've already pre-ordered. Personally, I'm gonna sit this one out, at least for now.