Why Nintendo is so stubborn when it comes to media formats?

[Magnus]

Soundwave said:

64DD was a huge mistake. They could've still salvaged that gen had they ditched that and went for a CD-ROM add-on.

The issue wasn't the vendors, I'm sure Philips would've been happy to give them CD drives, and if not them probably 10 other vendors.

The issue with CD is I think Miyamoto and several others at Nintendo hated the format and they twisted Yamauchi's arm on it, but in doing so they basically handed the console market on a silver platter to Sony. That's why game designers should not be making business decisions. 

I doubt loading times were an issue since that was a problem with the 64DD as well, as evidenced by the Ocarina of Time Iwata Asks.