Including HDD and HD support would cause Nintendo to do one of these things:
1) Increase price
2) Exclude other things (pack-in game, decrease/extract flash memory,etc)
3) Pay the difference itself, thus taking losses (unlikely for a company like Nintendo)
But IMO the biggest problem would be that games themselves would be more expensive to develop (as increase in resolution costs greatly unless it would be just upscaled signal) and would raise expectations.
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