On average a retailer will give you $15 for Mario Kart 8. That is 4 months before the switch comes out, The price could easily fall to $10 by then.
You think stores will be trading a brand new $60 game for a $10 dollar old game? No possible way.
A retailer doesn't see the $15 as the total value of that game. They see it as a $25 value as they intend to resell it.
Plus, they didn't pay $60 for the new game and its very likely that these "director cuts" won't be $60 games either.
When you consider the real cost, the potential for resell, the liklihood that these will be $40 games at launch and that Nintendo's part of making an agreement would absolutely mean they'd give credits to the retailer to drive a launch (all marketing budget)... this is very much reasonable. As someone who worked many years in retail... this is defintely a norm.
So they take the $10 dollar game and sell it for $25. Let's also say the games cost $40, and the store can get them for $25.
So in the most extreme case of
1) they are able to sell EVERY game they get. That is every game outdated and on a now retired system.
2) That the games cost $40 and not the $60 despite Nintendo giving no evidence of this and still calling it a "console"
3) That retailers can get them for $25.
In this very extreme never going to happen ever situation.. the stores are breaking even. Why would the retailers ever go for something that at the BEST chance of breaking even - even do this. At the 0.0000001% chance of this plan working, yet they get nothing for it.