I think that Nintendo might be hesitant to move everything to the cloud and end physical or downloadable releases because doing so can essentially negate the need for future consoles, plus it can make the performance of their games much more dependent on connection speeds which is something that Nintendo probably won't want to do so hastily given how rock-solid they want their gaming experiences to be when it comes to stability.
That said, I do think that Nintendo is likely to release a pro model of the Switch in the next couple of years and I am hoping that it will utilize Nivida's AI resolution upscaling technology that can basically put it on par with the PS5 and XBSX in terms of graphics. The streaming option to the cloud may be an option that Nintendo provides that can help to keep the older Switch consoles relevant for those that don't want to upgrade and it can give Nintendo the ability to dramatically increase the graphics performance of the Switch, mid-generation without totally alienating the owners of the original Switch.
I think that fans would be a lot more accepting of seeing new releases move to the cloud if it's 5-6 years after the console launch and Nintendo is giving owners of the original Switch a way to play new games that are coming out. For owners of the pro model, new games can be streamed as well or can still be owned physically or downloaded if users would prefer.
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