True. But they'd have to drop the price enough to the point where it puts enough people over the edge. 
It's it's $299 now, then a handheld model I'd imagine being somewhere between $230-250

As long as the Switch does well, I'm sure there will be a budget version like the 2DS eventually

HD and motion controls would likely still be present since they are in the Pro Controller as well.

I'd love a more portable Switch so I would be all over this. Guess we'll just have to wait and see.

I would expect the start of new style of hardware cycle from Nintendo where you see the main launch of the new platform, and then 2-3 years later a Switch Lite aimed at the handheld mass market priced sub-$200. This device will be the "true" successor to the 3DS. Then 2-3 years after that they can launch Switch 2, again focusing on the home market first.

I am not seeing any basis for your thesis in the quote.  
It is describing 3DS fans buying Switch now then upgrading to future versions of Switch.
Nothing there about future version being more focused on handhelds or noticeably smaller, etc.

The only thing I get from quote is Nintendo plans to continue Switch line indefinitely ala PS>PS2>PS3>PS4 etc,
with people buying into one gen being generally amenable to buying into the next gen.  
Handheld fans are mentioned being they are one of "source" pools to draw from, and the larger one at that. (vs Wii U)
But if they move to Switch now, there is no further need to change form factor to accomodate them,
as they would have already accepted the new form factor, which conventional upgrades can be applied to.

As already mentioned, the dock is not big cost factor, basically USB/HDMI/power pass-thru,
despite N's price gouging for those who lose/damage theirs or for whatever reason need/want a second dock unit.
Obviously as with any such platform, price will be able to drop thru lower production costs, and lower unit margins.
So OK, perhaps you or others would like smaller form factor, but I'm not seeing any basis of that here. 

Well, Shinya Takahashi, saying "...people who have bought a Nintendo home console in the past traditionally, they may treat Switch like a home console and buy it and use it for a long period of time, whereas people who have been traditionally Nintendo handheld gamers, they may buy Nintendo Switch. And then, for example, if a new version were to come out later, maybe they would decide to upgrade to that."

Can be interpreted as, home console gamers will buy the Switch and keep it for a long time, while handheld gamers may by the Switch and then upgrade to a later model. So, why are the home console gamers not upgrading in what Takahashi is proposing?

That is what is in this quote that indicates their intetion of the revision favoring handheld use.

Now, that can be speculated as to what that that means, the obvious improvements are pockeability, battery life, fanless, etc.

And yes, Nintendo could surprise us with even more revisions to the Switch, that we haven't thought of yet, that favors handheld gaming. They are quite creative afterall. :)

Having a portable only Switch the size of the original GBA with not touch screen and only buttons would be a dream come true. I'd buy more than one.

Ooh, don't really like the sound of that comment. I hope it's just a refined version, like the Game Boy Pocket and DSI for example. I'd hope Nintendo doesn't decide to do another New 3DS. Having an upgraded system only a few years after the initial device sounds awful to me.

Better battery and more internal storage