1. By your logic the home console market has also been shrinking and so PS4 should not be anywhere as successful as it is now. In 2010, roughly 4-5 years after Xbox 360, PS3, and Wii launched they sold a combined amount of 177 million units. In 2017, roughly 4-5 years since the Wii U, PS4, and Xbox One launched they sold a combined amount of 130 million units (since the year is not yet over I added a generous 8 million units to the 70 million units the PS4 has sold and 8 million to the 31 million units of the XONE sold 130 million; I am pretty sure sales in December will not add up to 16 million units). Yet PS4 is doing well, and home consoles, despite, much like portable consoles, are facing competition from mobile and PC gaming, have not vanished. The same goes for the portable market and Switch, just because it has shrunk does not mean that a player cannot do well. It certainly does not point to Switch becoming another Wii U or Gamecube as you seem to either be predicting.

2. The PS4 and XONE getting discounted to around $200 explains the sales boost for those systems. However, lets not throw around hyperbole that Switch did horribly (like you are trying to make it out to be in previous posts where you say it is not selling well). The Switch, as portable system at $300 (a price point where most portable cannot sell at) has pulled off numbers not too far from PS4 in the November after its first full year (in November of 2014 PS4 sold 831K). Assuming what you say about there being plenty of stock being true, the system still performed respectably at its price point. In addition, these numbers do not indicate another Wii U situation and are actually quite strong, in comparison the Wii U in November of 2013 (its first full November) sold 250K. If anything it shows that if Nintendo decreases pricing in the next few years (like Sony and MS did dramatically this year) the system has really high sales potential.

3. Switch is not completely devoid of third-party content and its portability has provided reason for consumers to purchase games (even if it is a lower quality port) and developers to bring games over (when feasible). The early success of the system will most likely drive more third-party releases. It is, however, true that the level of third-party support (particularly from larger Western publishers) will not come close to that of the XONE and PS4. That is not a huge issue, because Nintendo can provide software that are not available on the other platforms either (provided their software output can keep up like it did in 2017). Moreover, PS4 and XONE and PC gamers do not lock themselves into a single ecosystem, people can purchase multiple systems. Sony even stated that many of those that owned a Switch also owned a PS4. Just because the PS4 is going strong does not mean that the Switch will be weak (and the vice versa is also true);this particularly true for Switch with regards to PS4, XONE, and PC because the Switch offers portable gameplay that compliments the stationary gameplay of the aforementioned home consoles. 

4. I am not going to make predictions of the Switch's longterm success. I am not going to say that it will overtake PS4 (I doubt it will; though at the same time I do not think that means it will fail like the GC and Wii U either like you seem to be asserting in nearly every comment; the numbers themselves thus far indicate that it is reaching a much broader market than wither the Wii U or GC did). The milestones that the Switchought pass to indicate it is a solid performer (ie it has gone beyond the largely core Nintendo base that constituted Wii U and GC) is that it has to outsell Wii U by the first half of 2018 (ideally by the end of the fiscal year in March) and it has to surpass Gamecube (ideally being in the high 20 million or low 30 millions) by the end of 2018. December is also an important sales time for Nintendo, if the system fails to substantially increase sales then it is a clear indicator that there is an issue with momentum. Again this does not spell doom for Switch either nor does it indicate that it is wanning, but more likely it indicates that demand at $300 has decreased; an appropriate price cut and value bundles in such a situation can help regain momentum. Of course there are quite a few risks as well. For example, if momentum drops and Nintendo refuses to drop the price can reduce the sales potential of the system. Nintendo's software pipeline stalling creating large gaps in software releases in 2018 is another big risk (along with Nintendo creating software that does not appeal to the audience they are trying to capture; like they did on Wii U with Wii Sports HD compilation and Nintendo Land). However, assuming that Nintendo does continue with strong software releases and Switch either continues to sell as it has at $300 or Nintendo introduces a price cut then I can see the system doing extremely well. Even at this point, looking at the sales data up to now (including the respectable sales in November; which you have been trying to pass off as being disappointing), at the very least it does indicate that this is not a Wii U type situation with regards to sales (not even close actually as I elaborated further above).

PSP did great, the only thing about it that could be considered a fuck up would be the fact that it lost alot of potential software sales do to piracy but it sold over 80 million units of hardware.

Then you'll be happy to know that the OP's numbers are wrong.  As a fan of Nintendo, I wish someone would edit the OP, as it's causing a lot of confusion.

PS4 + Pro > XBOX ONE S .      Nov 16

PS4 + Pro > XBOX ONE S+X .  Nov 17

Does anyone know how the XBOX One X did compared to the PS4 Pro for the launch month just for comparison sake?

Pro had been outsold for about half a year worldwide. X1X has dropped out of the top 100 after 2 weeks already outside the U.S.