Well, you see in the eyes of gamers Nintendo can do no wrong, so they get a pass. And yeah, It's closer to 10 euro more or usually rounded off to that from what I'm seeing in comparison between switch and other systems with little to no sales or flash sales for the younger crowd or less wealthy owners and Switch does have a large base of younger people, who don't have their own income. That's exactly my point as to why Nintendo need to think of something fast, if they didn't have the threat of kids and teens jailbreaking or breaking there systems attempting to in the coming months, they could charge 20 euro more and it wouldn't matter much besides for some complaining but now they really need to step back and rethink this, maybe reduce prices for digital gaming drastically and have PSN/steam level flash sales and out an SKU with more built in storage or...something. They're on seriously thin ice if they don't counteract it the next few months, I'm not technically inclined but changing the chip seems to be the most difficult yet the best option. There is going to be more jailbreaking on the switch than there ever was on PSP with the internet and the streisand effect, those prices have to come down as every time a consumer goes and sees a game ten euro more on their system or can't afford a game you can't blame them to consider the alternative. Perhaps starting to build a strong digital market place, not filled with over priced mobile like games would be a start if they can't cheapen physical releases or bite the bullet and take the financial hit on their own terms until they change the chip. Perhaps a subscription based game pass type deal might counteract it but that'd have to be digital anyway, hmm, it's a tough situation all round. Hope they make the right call whatever they do.
There are plenty of physical games on Switch that have gone on sale and yet come on larger cartridges (namely 8 GB). In addition, games that fit on 8 GB and smaller cartridges seem to be priced in line with their disc based counterparts. Moreover, 3DS has cartridges that range from 1-8 GB (Vita game carts are also within this range) and yet most games are cheaper on that system compared to those that come on disc. The problem currently seems to be with the 16 and 32 GB carts, which will most likely be resolved as more units are produced and bulk prices are lowered. But these larger carts are not the ones that Capcom has to use.
As for the hacking thing, both the Wii, 3DS, DS have had similar vulnerabilities to Switch that eventually led to piracy. None of these systems died from it (not to mention systems like PS4 also being hackable at the moment). As for the demographic information you provided about a large base of teens and kids without their own income, Nintendo has already shared demographic information indicating Switch's audience currently mostly consists of younger adults with their own income.
Finally, you are blaming Nintendo for going with cartridges. Again, as with my previous comment, what would you have them do? If they released a system with no physical media then people would have jumped on them like they did with MS with the Xbox One (which was initially supposed to have physical media tied to a digital ecosystem (or PSP GO). In addition, as previously mentioned discs are not viable anymore. A physical BD ROM would not fit inside the Switch and mini Disc standards have not been updated in years.