My take on it is, if you want a home console, there is a SKU, if you want a handheld, there is a SKU they run exactly the same software (possibly like PS3/Vita Cross buy/Save or maybe interchangeable using the same disc/card). If you want both, you only need to purchase the software once.
A bit like the PlayStation TV and Vita allow, but better executed from a compatibility front.
Sales of either home/handheld hardware boost overall userbase, bigger audience for devs to market to. Nintendo don't have to spread there resources across 2 platformers allowing a greater frequency of releases.
Would be a really great concept if they could get it off the ground.