The 3DS doesn't have a successor because that style of portable/form factor doesn't have much of a future. Smartphones have cannibalized the "kiddie market", there's still space for the 3DS but it's a much more niche market, so Nintendo never bothered to really upgrade it and went straight to Switch which can do things and deliver a scale of experience a smartphone cannot.
So no, the whole "graphics don't matter" stuff is not accurate, if the Switch didn't have a relatively modern chipset it wouldn't be able to run games like Breath of the Wild, and if it didn't have games like that the appeal of the system would be far less impressive and your sales are far less.
Just because a niche group on these boards loves their itty/bitty small budget DS/3DS style gaming on the go, doesn't mean the general market reacts the same way to that. That doesn't impress a lot of people anymore (even kids). They had their iPad and look at 3DS and go "meh".
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