Sure, they should improve handheld mode as well. But handheld will always have a downgrade in comparison with handheld + docked. I don't see Nintendo having a portable videogame that is alone as powerful as a PS4/XO in next gen, at least not using their current low-price police. They need the dock to an extra supply of raw power
I understand having docked-only games is a issue, but they don't need ALL their games to be docked-only, only the fewer games where the portable mode alone can't run (probably some engine-specific 3rd party games)
Why? By the time Switch 2 releases, those systems will be a decade old. Mobile technology will have adanced a long way since then, along with the techniques for creating games.
I'm expecting Switch 2 to actually be far more optimised with switching between 1080p portable, and somewhere between 1440p-1800p docked. After having one long generation with Switch under their belt, they should be more prepared and comfortable with the tehnology and concept.