In a general sense, I think this is the direction Nintendo is heading. Anyone paying attention can see that they continue to add more to NSO every year. Therefore it will likely have an even greater focus on Nintendo's next console. So far, it has mostly been Nintendo games though with some Genesis games too. They could definitely add more to that.
As for pricing, I don't see why it couldn't be cheaper than Gamepass. Gamepass offers modern games. If NSO only offers retro games, then it should be possible for it to be cheaper than Gamepass, especially since Nintendo can provide a large chunk of that catalogue themselves.
curl-6 bet me that PS5 + X|S sales would reach 56m before year end 2023 and he was right.
My Bet With curl-6
My Threads:
Master Thread, Game of the Year/Decade
Switch Will Be #1 All Time
Zelda Will Outsell Mario (Achieved)
How Much Will MH Rise sell?
My Bet With Metallox