By your logic consoles should already be dead. Sadly, there are quite a few reasons to buy a console.

Just look at Disney Plus. You can sell the greatest turd of all time and people will still buy into it if it is filled with enough exclusive content.

If this logic is solid, I don't think Nintendo hardware will survive either. People will go for multi-purpose hardware instead of something that only does gaming.

Agree.
If we are talking about single companies' gaming market models failing, then they can be fixed, otherwise other companies can take their places in the market.
If, OTOH, we are talking about the whole console gaming market failing, then no console company is safe, they are all doomed without exceptions.

Anyhow, any single console market is made of HW and SW sales, royalties from 3rd parties and subscriptions, HW initially sold at a loss is relevant only if the other sources of revenues aren't enough to generate overall profit.

BTW, in the alternative model, Apple is the only HW maker that gets the lion's share of SW and subscriptions profits too, in the Android market Google is quite a little player in the HW market, and the same applies to MS in the PC market, where it is a near-monopolist in the OS and office suite market, but a dwarf in everything else, including HW, where any MS attempt either utterly failed or at best just remained niche, and a seller of optional subscription services like any other company, and much smaller than the largest competitors in the game subscription services, exactly the market we're talking about here.
In any case, in the alternative gaming future, Apple is the only HW maker that dominates SW and subscriptions too, this means just one out of hundreds HW makers able to dominate all the other major related markets too and at best just one out of three major OS makers able to dominate all the other major related markets too. Same applies for subscription sellers, again, in the non console market, Apple is the only one that dominates the two other major related markets, Steam, PC subscriptions leader, tried to create its own HW PC-based platform, but it failed.
Overall, with a puny success rate, this alternative model isn't a very promising scenario for console HW makers, and it isn't even considering them as OS and subscription providers, with a 33% success rate at best.

Eventually yes they might but could take another 20 years.

Subscription services haven’t killed movie theaters (Well 2020 it kinda did due to corona)

For the most part no. Streaming can’t replace actual physical hardware.

Microsoft are the only ones pushing streaming hard.
Sony and Nintendo are still making a killing the old way.

Everything will coexist in a new way. It won't simply die off. Just be different

Yes, sure, everything eventually dies. But if you have been saying this for 2 gens already you know you are just wrong and trying the same bet until it turns true so you can say you were right.

Once cloud gaming really becomes a thing, I’m sure tv docks for phones will also quickly become a thing.  It shouldn’t be that big of a deal, people don’t have any issues with the switch. 

Nintendo will die too eventually