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I may be proven wrong but i still say it's a bad idea.
Built in controllers means it's a 3DS part 2; smaller battery means people will complain… a LOT; smaller joy cons... i can't even imagine how that could be pratical.

Making a new Switch model that can't be used as the popular console will confuse people, will make it seem inferior.
As an exemple, Wii U also had a cheaper model, but seeing as it was inferior to the other version, nobody cared; PS3 also had a 20GB version at 500. Did people care? No. They only cared about the other, beefier, pricier version.

People don't mind paying a bit more to get the full experience.