Snipperclips is a low budget indie game that was being developed as a flash game.
As for giving one of their Western devs a shot at a "AA" IP ... I mean it's been a long, long, long time.
The last one I can remember was Geist for the GameCube. After the N64 gen and Iwata taking over in 2002, Nintendo started to cut ties to a lot of their Western partners (Rare, Left Field, Silicon Knights, Factor 5, etc.) and Retro has basically been a 1 game studio (Metroid or DKC) since, when that wasn't the original intention of the studio.
Retro's early years before Metroid Prime were plagued with incompetent management, and lack of progress. They regularly went over budget, were understaffed for the games they had in development, and simply had too many games in development at the time. It's studio head was hardly there, and was using company money to run illegal porn sites and other scandalous activities. It was so bad that when Miyamoto and NCL reps first visited the studio, they were appalled at the sloppy development structure Retro had. After Nintendo fully acquired them, they basically had to kill those expensive projects and fire a ton of people just to make Metroid Prime the best it can be.