The problem with the case made in the OP and pretty much all these threads where people say Nintendo should go 3rd party is they make bad assumptions. If Nintendo went third party, they lose:
Hardware revenue
Accessory revenue
Licensing fees from other companies making software/accessories for their platform
Their own digital store, along with all the revenue from it
And coming soon, revenue from online subscription fees
They lose all of this for what? The potential to maybe potentially sell more software on other platforms? It's easy to assume that if Zelda sells such and such solely on one platform, it would sell X amount more on Xbone/PS4. That clashes directly with the point made in the OP about Nintendo having no direct competition. If you put Zelda onto other platforms where you also have gems like Witcher among others, who is to say Zelda sells as well? Same with all the Mario sports titles, and party games. Or Mario Kart. If gamers could choose Horizon 3 over Mario Kart, who is to say they wouldn't?
And with direct competition, they lose another thing I didn't list above: price gouging. Nintendo titles take FOR EV ER to drop in price, if they ever do. They lose that if they go multiplat. They simply will not be able to compete when other great games are there on sale for $20-30 and their titles are still $50-60.
It's always been a silly idea, and still is after the Switch reveal.
Essay Pro