Yes it should be upgradable, in a very simple plug and play way like the Supplemental Computing Device patent (SCD).

Base Console NX -
2.5 TFLOP 14nm AMD
10GB RAM
$299.99 Fall 2016

NX SDC -
Adds second GPU, doubles compute performance to around 4.8 TFLOP
4K output
$149.99, 2017 release

NX Portable
- 600-700 GFLOP portable
Can dock with NX SDC to have console quality graphics at home
No need to purchase both NX Portable + Console
$249.99

Basically in this setup you don't have to pay $250 + $300 if you have the portable and want the console too (costing $550). You could buy the portable and just get the SCD for $400 total. 

Thats exactly what upgradable hardware would allow. They would not need to replace the system for the next decade. 

They can focus on software and innovative peripherals instead refreshing their console cycle every 5 years. All of the recent Nintendo innovation could have been delivered in the form of peripherals. The NES/SNES/ N64/Gamecube/Wii/Wii U are Nintendo's history with home consoles. So we have power distinguishing the first  4 generations and then peripherals and power distinguishing the latter 2. What about upgradable hardware will hurt Nintendo's output? 

DIminishing returns also means we won't see jumps like SNES > N64, N64> Gamecube , Wii > Wii U

Also worth noting that upgradable hadrware has far more history with Nintendo, Sony/Microsoft are more emulating them ;)

Not really. People buy consoles so they don't have to worry about compatibility, because overall accessibility (inclduing price of harware), because they use their PCs ( most specifically laptops since we're in 2016) for most things  and games are the least important of the bunch. Also because consoles are just more social/casual, living room friendly devices with huge brand power behind them. Optional upgrades have always been around in the console space, just not usually relating to graphics/performance. 

"Upgrades" only become a problem when hardware is not backwards compatible. A time will come when a new games aren't compatible with an older models, but thats just a typical console cycle for you. Similarly there comes a point where old Iphones (iPhone 4 and below) stop being compatible with newer Operating systems and apps. Only on videogame forums are casual consumers seen as too dense to figure out that they need to upate their 6 year old device in order to experience new stuff. 

10/10 comment.

I think it'd be a smart idea:
release NX and 1/2 years after that when PS5/X2 arrive just release an add-on that improves the device and market it like : "Buy a next gen console for 399$ OR buy a 100$ add-on for the console you already have in your living room"

No way!

Nah, the idea of an upgradable console just doesn't sound like somethting that could easily be executed successfully.

So the SCD?