I agree with some of your assessments but I think there are several oversights.
Firstly we keep talking as if handheld and console audiences are mutually exclusive, as if someone who picks up a Nintendo handheld has no interest in playing on a Nintendo console and vise versa. It's portable shortcomings are not without a gain, and vise versa to their home console short comings. We are yet to see price but if Nintendo manages to hit $250, they are offering a hugely convenient device for people who only have a casual interest in Nintendo, and a great value device for those with a strong interest. At this point in the game if you like Nintendo it's because their games, let's not beat around the bush. This hybrid approach will offer the best value where ganes are concerned, especially from Nintendo's own financial perspective of creating and selling them.
I like Nintendo but I'm not crazy about handheld gaming like I was 10 years ago, meanwhile the Wii U never justified it's cost to me and didn't have enough games to get me on board. By Nintendo combing those 2 products into one, and selling it for under $300, im more likely to purchase the system compared to individual systems which I only have a partial interest in.
Especially where the home console is concerned Nintendo was NEVER going to steal Thunder from PS4/XB1, not 3 years into the generation. Especially not with the Pro/Scorpio being announced (I'll be getting myself a Pro). This dream that Nintendo was going to come into the core market after one of the worst consoles in years and steal PS4's momentum needs to die. At most Nintendo could have improved upon Wii U sales and come a fairly distant third.
People acting like they need to see the big AAA third party titles on the NS for it to get their purchase yet haven't adopted a PS4/XB1/PCare kidding themselves. You are in a tiny minority, looking for Nintendo to fulfil a niche Sony and Ms have been owning for the last decade. Buy yourself a PS4/X1 this holiday and put yourself out of your misery. The only reason you would wait years for Nintendo to do something Sony and Ms are already doing is because you value Nintendo's games more. Am I wrong?
The great thing about NS is that it is highly adaptable. 2 years down the line, Nintendo can offer you a standalone $179 handheld or a $99 streaming/gaming box. For those who actually like Nintendo games, I dont see anyone being disappointed by the end of the generation, so I dont agree with your trajectory of succeed then fail. More likely succeed, slow down, then peak 3-4 years into its life. Sure you won't see Zelda in 4k or with Horizons level of fidelity but the vast majority of Nintendo's game will look stunning regardless and run smooth as they typically do.
The last mystery is really whether it functions as a tablet. If it does Nintendo may have just produced the go to present for kids in 2017, because I know most parents aren't about to spend $500 on an Ipad for a 10 year old. Having seen it though, I'm happy to admit it not going to get much traction in the adult tablet market.
