Ok but my point still stands, both their handhelds and consoles had large leaps which impacted their output and would have continued to get worse if they had two separate systems.
I agree, and I'd also argue this is why Nintendo pulled out of the power wars starting with the Wii. Increased AAA development costs were putting a lot of pressure on Nintendo, a company who's always been very conservative with Game Budgets. So by not competing on Power, they can keep development budgets and team sizes as low as possible both for them and other developers who want to make something less costly than a AAA console game. The Switch has more than enough power for Nintendo's needs for quite a while, and many games these days are developed on flexible engines that don't really need anymore fidelity than what the Switch can handle, which leads to great third party support as well.
I think we're reaching the point where consumers are getting less and less wowed by each generational leap. You saw signs of this with 7th gen consoles, which still saw plenty of great AAA and indie games released well into the current generation as developers and consumers were still fine with that level of specs for a little while longer. This gen could last even longer, as Next generation with 4k standard means that development costs and team sizes will be even larger for AAA games, and the importance of remasters, indies, and mid-budget titles becomes even more prominent. This means that Switch, PS4, and Xbox One will still see plenty of great games even 4 or 5 years into next generation.