First, this would make 3rd party devs in part complacent to port games into the Switch. "Just get it on the XBox and play it there. Second, Nintendo games would have to compete with the Game Pass games, reducing their profits. Third, Nintendo platforms would move less software overall, losing a chunk of their revenue.
1. The third parties you speak of aren't porting their games to Switch to begin with. For everyone else, it's obvious that an actual port will be more profitable. For one, it's more attractive for gamers if they aren't dependent on an internet connection to play a game, and two, being part of Gamepass means to only get a few cents from everyone who plays your game.
2. and 3. We have yet to see a Nintendo console where Nintendo games can't compete with third party games, so that point of yours is moot. Beyond that, you aren't seeing the full benefit for Nintendo. Currently, multi-console ownership is the result when someone wants to play Nintendo games and AAA third party games. This makes a gamer divide their money across two ecosystems. Gamepass being accessible through Switch can make a non-Nintendo console obsolete, so all the money that is spent on video games goes through Nintendo, so software sales go up.
EDIT: The last sentence is worded awkwardly. A gamer would buy all of their games on Switch instead of dividing the same purchases across two consoles.Last edited by RolStoppable - on 22 February 2019