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New Switch every 2-3 years, best mobile chip Nintendo can get every time out.

Old model is supported for as long as its feasible.

No "new generation" nonsense, just one continuing generation basically, much like PC ... where are the generational breaks in PC gaming? There are none, you just buy a new GPU when you are ready.

Nintendo will make more money this way and ultimately while a small minority will complain, the majority of the consumer base will enjoy the new setup.

Waiting until 2022/23 to upgrade the current model in a meaningful way is stupid, all that's going to happen is Nintendo will lose all momentum they have now and the hardware will become badly out dated and non-desirable. The Switch is not a casual platform like the Wii, nor is it a kiddie budget machine like the Game Boy was where the hardware doesn't really matter. It has to be relevant on a technology level for the "it's a home console + portable" aspect to work, if its too far outdated as a home console the whole appeal of it falls apart and its just an oversized Game Boy with a TV output. 

That's something the has limited appeal.