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 policy. 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)
Of course not all games need to be docked-only, but just having any that are already kinda breaks the premise of the console. Suddenly anyone who bought a Switch because they wanted it as a portable console will have doubts over buying the next one, as maybe its best games could all be incompatible with portable mode. It's a bad business move, I'd say.
And um, I wouldn't say the $300 price tag for a console with Wii U level graphics is a "low-price policy", and that policy definitely isn't a thing with their vast library of overpriced $60 games (never forget the Tropical Freeze port being more expensive than the original release).
Either way, I do think they can make a significantly more powerful console for a lower price. Technology will have come a long way from 2017 to 2024, or 2025, or whenever they release the next one. I think they should take their time and really flesh out the Switch's library, make it a long-term console (8 years), so that not only the next one can be much more powerful at a reasonable price, but also the consumers will be more willing to buy it knowing that it's gonna be a long-term thing.