No thanks. That's even worse than digital since you need a constant internet connection.
Releasing a VC cart along with selling the titles separately would be better.
"Even worse than digital" when digital is the best option possible for retro games.
But yeah, I'd rather have a streaming service on the hardware I already own than a separate console just for retro games. Neither is an attractive option, but streaming is the less worse. I don't really get the appeal of the NES/SNES Classic to be honest. I guess it's a cheap option for people who haven't already had a Wii for 10 years and access to the larger, more robust selection of VC titles.
Multi-game cart like the Ultimate Genesis Collection for PS3/360 would be better too, but still not as good as just a straight digital VC service like the Wii/Wii U/3DS.
Now what would really make me happy is if my current VC purchases carry over to Switch, or at least have the option to do a $1 upgrade like Wii -> Wii U. That's all linked to Nintendo Network now, so Nintendo could do it if they wanted.