I wouldn't say they have a more diverse library than Nintendo. They just have a more opposite library. You will never have the kind of experiences you get on Nintendo anywhere else, and that's not from a quality POV, that's from a genre POV. They don't have an abundance of AAA 2D platformers or AAA 3D platformers. They don't make AAA party games. They don't give anyone a reason to own more than two controllers, and that's mostly just for fighting games. They don't make AAA rail shooters like Star Fox or AAA racers in the same vein as F-Zero. They don't make exploration games in the same vein as Metroid.
You can't boil Nintendo games down to just being E rated. That's not why those people buy those games. No one is making those types of games anymore to that quality but Nintendo.
That doesn't mean that I don't think they should expand to make games that the PSXB audience want's, because they should, but it's not because those guys are all encompassing and Nintendo isn't. Both offer a wide variety of different things, but PSXB offers the far more popular and lucrative genres at that AAA quality.
Well, this is new.