If Nintendo is smart, never. There's no benefit that could come from a Switch with more processing power that couldn't be achieved by more logical revisions that improve things such as portability and battery life.
I mostly agree. A smaller form factor and better battery life are the obvious improvements, and ones that don't really fragment the install base. However, I think they could also make whatever improvements are necessary to allow portable and docked modes that have same performance. (I believe that's a part battery life, part heat production issue. I figure that should be solvable without much expense in the near future)