Very interesting Point/Counterpoint going on here where I happen to agree with both sides. As soon as Dan made those comments, I was thinking "That is what would be necessary, but is it a good idea?", and this article basically voices those concerns.
I do think that the "we don't need third parties" view is a little bullshit. Third parties make a lot of great titles, despite all of the bullshit and I certainly don't think any Nintendo fan would object to said games existing on the console.
Whether it makes business sense, I don't know. It is a very slippery slope...you start paying for third parties, whos to say there will ever come a time when you can stop? If you say, "we will pay you if we need to", than third parties will always say that you need to. That isn't a good situation for Nintendo, especially when they are starting this climb looking up at a sheer faced mountain.
On the other hand, if Nintendo does somehow pull it off and somehow creates that fanbase on Nintendo consoles who are hungry for that third party content (and can actually trust that third party content), third parties will not turn a blind eye to it. They will go where the money is. However, it is a steep and expensive climb.
I think that Nintendo gets a little too much flak for their "treatment" of third parties, when the street goes both ways. No matter what, it is not an enviable position to be in...