It will fail to get decent 3rd party support for any meaningful multiplats. We'll see 'just dance' kind of stuff at best.
I don't believe that there is enough of a market for a relatively bulky, not particularly fast 'master-of-none' device such as this. Incredible first party could make it compelling, but the biggest likely release is Zelda, which presents something of a no-win. Big Nintendo fans already have WiiUs. Zelda was promised for the WiiU. If they cancel Zelda for WiiU, it's going to REALLY dirty their reputation. If they don't, it could cripple sales potential for the Switch.
My idea is that they should absolutely not cancel Zelda switch, but go strong with aggressive tactics right out of the gate.
Keep supply tightly coiled to demand, to nearly but not quite keep them in stock. Instead of having enough stock for 110% of demand, try to hit more like 95% of demand so that they're not impossible to find, but get that extra hype that comes from something that seems to be popular by association.
Also, price it NO MORE than $199 with Zelda packed in. If they can't meet the release date, then pack in whatever the best game they can instead. Give the full controller in that package as well.
Nintendo makes HUGE margins on their 1st party game sales, as they own the IPs, they don't have to pay external devs, etc. Ditto accessory packs, extra controllers, etc. If they have to lose money to get this thing in a lot of hands quickly, that's the right path.
If this weak device with basically zero chance of decent multiplat support, major online infrastructure, etc, launches for $249 and no pack-in system seller? I think the odds are decent it's the last Nintendo console released. They will make the occassional 'SNES Mini' kind of device every few years as stocking stuffers, but go fully third party. Because if the Switch sells as poorly or worse than the WiiU, which is looking more likely all the time, then I can't see them bothering to try again.