Hmm interesting, I can't say I agree with this. If this is the case I don't see how something like the SNES Classic can sell so well in 2018-2019 - it certainly can't be all people in their 30s buying it. Or the countless remasters being cranked out that often still sell well even when competing against the flashy modern games. You've also got tons of games even today which return to retro style graphics and gameplay and prove enduring and successful games. Games like Minecraft, Terraria, etc.
To me games are both art and entertainment - both of which transcend time if well-crafted enough, just like all other great forms of art and entertainment. I wouldn't look back at, say, Goodfellas, Godfather, Star Wars, or Citizen Kane is merely renowned to this day because of its "nostalgia" for people in their 60s-70s. Great art is great art. I wouldn't say J R.R. Tolkien's The Hobbit is only considered one of the great fantasy works because of nostalgia.
I can only speak for myself of course, but I can certainly go back and play Eternal Darkness, Halo, or Monkey Ball and enjoy the hell out of it, and ironically far more than certain games that come out today. It's true some games do age better than others but this is true with all forms of art/entertainment.
I suppose you could argue the tech element in gaming is a major factor moreso than in other mediums but for me it's still only a vehicle in telling the story and the foundation for the experience. It always takes a backseat for the gameplay/narrative/overall craftsmanship.
The snes classic sells for the same reason that android or IOS games sell. There is a market for it. I think a lot here are disregarding how big a role nostalgia plays in these kinda things. Lets take MGS in 1998 for instance. Its my favorite game in the series, but I KNOW its nowhere near as good as MGS3 snake eater, or MGS5 which expanded on the promise of MGS in every imaginable way. However, it was the first game to do a lot of things it did. Or take contra 3, can that game hold a candle to the likes of Vanquish? Or take FF7 nd FF7 remake, FF7 will be better in every conceivable way, but I can assure you it won't become a cult classic like the original. Or look at the links awakening remake, ignoring graphics and sound, the entire game has been modernized with tons of QOL features built in, improving vastly on the original. If they just re-skinned the original and released it now without those improvements it will not sell half as much as the remake will sell. Or look at Vagrant Story, which as far as I am concerned was the first Dark souls type game, is it better than Demon souls? To me it still is.
Saying nostalgia doesn't in any way mean these games aren't good on their own merit, doesn't mean someone can't still play them today, just means they have been vastly outdone already but for whatever reason they still hold some relevance in your heart. The fact that most will go and play an older gam they played before, with whaat in the modern day will be considered as broken features or poor implementation of certain features... is literally 100% proof of the effect of nostalgia.
Want more proof? Take your original halo, how it loks and how it plays, then imagine that that game was released this year looking like that and playing like that. You still think you would have enjoyed the hell out of it in a world where Metro exodus, a ton of CODs and BFs...etc ha come before such a game?