It's a shame that it's undockable because if it were, I'd replace my current switch with this as my main system in a second. I'm sure it's because the Switch Lite is not meant to run at a higher performance and does not have a fan, but not being able to play it on the TV is a problem for me. I don't take my Switch with me anywhere but I do play a lot around the house, and I'm tempted to get one just for that. Looks like a great handheld with *gasp* an actual D-pad!
Pretty sure it does have a fan:
But yeah not as good cooling is the only reason I can think of for it not being compatible. Don't see any other reason to not support a dock, it is a shame. I mean it probably can't physically fit into the current dock, but they could always release another dock or an adapter/cable for the current docks. Dropping support for video output isn't going to reduce production costs.
Marketing and maximizing profits are reasons to not support a dock. While in the past I had proposed a handheld-first Switch with optional dock purchase, it's an idea that is not as easy to market and comes with the problem of allocating shelf space to a new dock because the different size of the new SKU necessitates its own dock. There's also the issue of potentially devaluing the standard SKU, but the plan is to offer both models side by side and have both of them sell as well as possible.
While Nintendo does have an error on their website as far as confusion about Joy-Con compatibility is concerned, it's overall easier to market handheld-only than handheld-first despite the console's name. Switch Lite is a Switch that can't switch, but in the end the market is probably not going to care about that too much, because the feature to switch isn't necessarily mandatory in any given purchase decision and will probably be completely irrelevant in many cases.