No, neither SKU is overpriced.

PSP launched as a very powerful HH system, not as a weak hybrid. TV Dock is something that possibly don't cost more than 20 bucks.

The HW offered was budget level, with the shield counterpart (which is basically all the highest cost parts anyway) costed much lower than Switch.

Yes it should be on a price similar to what Lite is launching at.

Because if you want to go the "it have more functions than PSP or Vita" (ignoring they are much older) then I could easily go to it having less functions than X1 and PS4 thus being to expensive comparing to X1 that you could find for 199 (249-299 MSRP) at the time Switch launched.

It is still hybrid and counts as a console =p.

Doesn't make much sense considering the posts on this context you made. If neither are overpriced then also neither have a good price advantage and customers would be crazy after the dock as well if they buy the HH version and later want to hook-up to the TV.

For me it seems like you want to have the cake and eat it.

That's understandable because you commonly judge situations in a wrong manner.

Haha, I’m the exact opposite with mine.

Another thing I just realized is that the Nintendo Switch Lite coming out the same day as Link's Awakening continues a trend of Nintendo releasing a new system, whether it's a revision or a new console entirely, with a Zelda game. Furthermore, the revised model is releasing with a Zelda remake. Just like the New 3DS when it launched overseas in February 2015, it released with Majora's Mask 3D.

Seriously:

2006 - Wii/Twilight Princess
2015 - New 3DS/Majora's Mask 3D
2017 - Switch/Breath of the Wild
2019 - Switch Lite/Link's Awakening

Looks like Zelda has become the default system seller/marking tool for Nintendo.

Where is the non portable switch?,I only play at home, getting rid of the touch screen and batterie could drastically reduce the price I would love to see that model, but very unlikely since most people play on handheld mode, I am sure I am the minority here.
Anyway going back to the topic I think this new model is a great idea since it’s totally optional, more options is better for the consumers, you can buy whatever model you like the most.

Quick question because I'm lazy and about to go to bed. If you buy this, can you later buy the dock to go with it?

So...

Is VGC gonna count the sales for this on the Consoles section or in the Handhelds section?

It really was no surprise. The cheaper alternative to the 3DS, the 2DS released the same time as Pokemon X/Y for a reason, and with the upcoming release of Sword/Shield, this was a no-brainer.

Also, Nintendo/Nvidia can utilise Tegra processors off the manufacturing line that have slight defects, where the GPU cannot run in full 1080p TV mode, but can happily handle 720p handheld mode.

From the standpoint of a Switch owner, the move doesn't make sense, but from a business perspective, it makes all the sense in the world.