Nothing prevented them from launching at 16nm FinFET originally, but they still cheaped out because they are Nintendo.
Also anything that adds performance profiles makes dev more complicated, compared to just focusing on 2 profiles as now.
I do think your idea has merit, although it ignores that DLSS isn't just a hardware feature, but requires games be built around it.
And that probably isn't realistic for every game that comes out on Switch, so saying native resolution doesn't matter is misguided.
That said, plenty of games don't reach 720p in handheld mode, so it seems plausible devs could use DLSS to upscale to 720p output,
(knowing they would still need to use standard upscaling for older Switch models which are and will be the vast majority of platform)
That could allow those more demanding games to achieve much better image quality at the current 720p resolution, along with OLED.
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