First of all, Labo didn't even sell all that much. The highest selling kit stands at just 750k as of November the 17th by VGC numbers. So it doesn't really support the notion that Nintendo fans will buy anything first party.
Secondly, it really wasn't that bad, it was actually quite a clever and creative idea and people have done some really cool stuff with it, it was just overpriced for what it was and not aimed at forum-going "hardcorez" like us.
He's using Labo as an example to support the OP