I think it's more like all their eggs are in 3/4 of a basket.  There's still mobile and that's probably going to net them a decent percentage of their yearly revenue once they make enough games for it.

Hmmm, so the Gamecube's home console revenue was lower than Wii U's. So even though more units were sold, GameCube actually ended up being Nintendo's least successful handheld or home console.

That's a myth, both consoles had very strong third party support. DS had Square and Enix supporting it strong, even releasing a mainline Dragon Quest, not to mention all the other Level 5 stuff, such as Professor Layton: which was one of the most popular and critically praised new franchises of the generation. Wii had the strongest efforts EA and Ubisoft ever put on a Nintendo console ever putting on lots of exclusives, and they made some of their multi platform Wii games better than the competition, unlike say the GameCube or Wii U which got no exclusives, only gimped versions of multi platform titles. Whether you like those companies or not, both of them helped the Wii with its success, even keeping it above the Wii U in software sales for most of its lifetime. While Wii didn't have the strongest Japanese support, and DS didn't have the strongest Western support, combined the two of them made for one of the most powerful lineups a company has ever had in the history of the industry; combined, they are easily Nintendo's top, totally killing what SNES and GB had in the early to mid 90s - DS had about 4-5X as many RPGs as SNES: and most of what was on SNES had been remade and improved upon for Wii or DS, and the rest got ported into the VC: not to mention all the new genres that SNES didn't even have, or did very half-assed (racing, FPS, 3D platformers, third person shooters, survival and horror, adventure titles, etc...). The only real clear better generation PS2, especially once PSP launched about mid-gen. The PSX being the only other clear rival.

I've seen quite a few with this opinion and IMO its flawed.  Does a person need to cut off their arms to simply remove their coat?  Obviously a dramatic example, but here's the point:  Switch is already portable in nature, with hybrid ability.  For a  more portable switch, make the switch ability optional.  So no joycon (fused controls aka Vita, GBA etc) or cradle, ithose would be sold separate for the full experience.

So a Switch "Lite" as in, Lite in features, but definitely still able to  switch modes if one desires to get the extra peripherals.  an even more portable oriented switch (battery improvement, etc) is easy to predict.  But Nintendo will not release a portable that totally loses switching ability - they have created their new sub brand and its hybrid function for at least the next 10 yrs.  

Don't think Nintendo really had much of a choice here. Three factors:

1. Their console division has been beaten badly 3/4 last generations and the last one basically pushed them into full irrelevance in the home console market.

2. Supporting two systems that have "better than basic PS2 graphics" becomes virtually impossible as time goes on. Even Sony or MS IMO would not be able to do it. The resource demands to constantly keep new games coming for two systems like that becomes too high of a burden. We saw that already with Wii U + 3DS. A home system with PS4 graphics and a portable with PS3 graphics is bordering on impossible to manage. 

3. They didn't have any kind of new "gimmick" to market/sell a differentiated home console around. They haven't been able to come up with a new Wiimote type gizmo, even the Switch is basically just their older hardware functionality amalgamated into a portable form factor.

A single hybrid device has advantages, but it likely also means they'll never see 250 million type hardware numbers (or close) again. The 3DS has like 5 different model revisions but the sum total of all that is only 66 million after 6+ years, so I don't think just releasing a few revisions on the basis of some size differences (mainly) is going to alone be some magic ticket. You need to have a more major revision in there with more major hardware changes like Apple does. 

It certainly would be nice for Nintendo to actually make the "hybrid" gimmick worth something by actually TREATING it like a hybrid system. But I think you're gonna keep on waiting to see that, actually.

The difference between home consoles and handheld consoles were getting smaller and smaller. If you look at the 3DS and Wii U library you will notice that the software was starting to look the same. I mean we got a few Wii U to 3DS ports.

The Switch is all about improving the software pipeline. Instead of making two Mario karts per generation we get one and an new ip. This allows a bigger chance for the new ips to come out and become big. An example is the Animal Crossing team. Instead of making Animal Crossing on the Wii U (which won't well) they made Splatoon. Splatoon became bigger than any home console Animal Crossing. Nintendo did it again with the Mario Kart team with Arms. Expect more new ips coming from Nintendo this generation because they are aiming for huge success.

Another thing to note. Software like Shovel Knight, Blaster Master Zero, Kamiko, and all of those sorts of games that (at least I thought) might disappear after handhelds got too powerful, are all fine on the Switch. They're thriving.

Personally speaking, as the DS took off, and began moving into the 3DS era, I wasn't sure we would see anymore of those 8-bit and 16-bit like classic style games.

Depends on how you define "keep on waiting". A mainline Pokemon is already announced for the system, which means Nintendo is "TREATING it like a hybrid system." 

A home box switch would be OK, but only so if it goes crazy low with the price point. Which is possible...
I can se in 3 years 3 possible varients:
Switch XL: 1080p screen, compleatly fills the bezel, with a X2 or a even better processor. Battery life will be the same. 1440p in docked. 350~400$.
Switch SP: clamshell design, 720p screen, X2. Longer battery life is key here. Mostly for portable use. 250~300$
Switch TV: 1080p home device at 150$.