Because 3rd-parties mostly don't make informed decisions. The managers are just people, they decide based on a whim or their general like and dislike for platforms. If the dissonance between reality and wishes becomes too big, it may result in others forcing a decision, but some companies just have the deep pockets to sit out such decisions for a while.

No doubt 3rd-parties definitely choose based on system architecture, which can be seen as dislike. The PS2/PS3 was annoying to develop for, but since then PS4/PS5/XB1/XBS are similar to PC enough making porting easy. The Switch is a bit annoying to develop for with the storage limitations/cartridges and downgrading everything down. Smaller devs have said before that the porting process to Switch is expensive.

It's mostly bias from a few people like Nagoshi, Harada and Kondo. According to Harada's logic a Switch release for the higher-budget Bandai Namco Studios titles would make them lose their appeal as premium products because the Switch is a "kiddy console", so while only PS gets those, Switch gets the (often very low effort) kiddy games. It almost feels like he's trying to make his fantasy come true (PS = hardcore gamers / Nintendo = kids). Sooner or later he and Nagoshi will have to realize that the Switch's success is not just from more kids and casual gamers buying Nintendo hardware/software than before: all the players that PlayStation is losing in Japan haven't abandoned console gaming as a whole, most of them are moving to Switch and that trend is not going to stop anytime soon.
I don't have any hope for Kondo ever releasing a game on a non-Sony console/handheld, even when The Legend of Heroes and Ys decline even further every year.

From Japanese-publishers' perspective, yes, clearly.

Whether its Sakura Wars, Densha GO!, Dragon Ball, Gundam, Sword Art Online, Tales of - all of these games is really pushing graphics to such a degree that it could not be ported to the Switch. Certain decision-makers would simply like to deny reality and allow franchisees to fall into obscurity on their home market rather than have to Switch as part of their multiple launch day plans.
Sakura Wars is a great example, Sega gets over 1 million sales of VC4 and what do they do? PS4 exclusive that apparently hasn't even sold 300K worldwide... later we wonder why their Japanese video game division is struggling. Also you cannot tell me it doesn't make some sense to port certain Yakuza titles to the Switch and try to build an audience for the franchise. 

In any case, Marvelous, Koei, Konami, Nippon Ichi, and other smaller studios will eat into their market share in the coming years if they maintain their current road-map. 

The medium-size companies and Capcomm, if they maintain their current road-map, will eat all the third-party market share on Switch.

And the other companies ( likewise Sega) go down on the road.

Since Nintendo's FY20 Q3 earnings release is approaching, here are the last known domestic shipments for Nintendo titles on Nintendo Switch (LTD as of September 30, 2020 unless noted otherwise):

Title (release year) - sales units <rank among the best-selling games ever>

01. Animal Crossing: New Horizons (2020) - 8.180.000 <2nd>
02. Super Smash Bros. Ultimate (2018) - 4.820.000 <13th>
03. Pokémon Sword/Shield (2019) - 4.770.000 <14th>
04. Splatoon 2 (2017) - 4.350.000 <19th>
05. Mario Kart 8 Deluxe (2017) - 4.040.000 <25th>

06. Super Mario Odyssey (2017) - 2.530.000
07. The Legend of Zelda: Breath of the Wild (2017) - 2.230.000
08. Pokémon: Let's Go, Pikachu/Eevee! (2018) - 2.070.000 * as of March 31, 2020
09. Super Mario Party (2018) - 2.070.000
10. Ring Fit Adventure (2019) - 1.800.000

11. Super Mario Maker 2 (2019) - 1.160.000 * as of March 31, 2020
12. New Super Mario Bros. U Deluxe (2019) - 1.130.000
13. Luigi's Mansion 3 (2019) - 920.000
14. Kirby Star Allies (2018) - 860.000 * as of March 31, 2019
15. Clubhouse Games: 51 Worldwide Classics (2020) - 800.000

16. Super Mario 3D All-Stars (2020) - 750.000
17. Fire Emblem: Three Houses (2019) - 580.000 * as of March 31, 2020
18. Mario Tennis Aces (2018) - 550.000 * as of March 31, 2019
19. ARMS (2017) - 470.000 * as of March 31, 2018
20. The Legend of Zelda: Link's Awakening (2019) - 430.000 * as of March 31, 2020

21. Paper Mario: The Origami King (2020) - 430.000
22. Pokémon Mystery Dungeon: Rescue Team DX (2020) - 360.000 * as of March 31, 2020
23. Nintendo Labo Toy-Con 01: Variety Kit (2018) - 330.000 * as of March 31, 2019
24. 1-2-Switch (2017) - 320.000 ** from April 1, 2017 to March 31, 2018 (launch month shipments are unknown)
25. Xenoblade Chronicles 2 (2017) - 310.000 * as of March 31, 2018

26. Xenoblade Chronicles: Definitive Edition (2020) - 300.000
27. Donkey Kong Country: Tropical Freeze (2018) - 290.000 * as of March 31, 2019
28. Captain Toad: Treasure Tracker (2018) - 240.000 * as of March 31, 2019
29. Astral Chain (2019) - 160.000 * as of March 31, 2020
30. Yoshi's Crafted World (2019) - 140.000 * as of March 31, 2019

31. Marvel Ultimate Alliance 3: The Black Order (2019) - 40.000 * as of March 31, 2020

Unknown:
- Snipperclips: Cut It Out, Together! (2017)
- Mario + Rabbids: Kingdom Battle (2018)
- Bayonetta 2 (2018)
- Nintendo Labo Toy-Con 02: Robot Kit (2018)
- Sushi Striker: The Way of Sushido (2018)
- Nintendo Labo Toy-Con 03: Drive Kit (2018)
- Xenoblade Chronicles 2: Torna - The Golden Country (2018)
- Nintendo Labo Toy-Con 04: VR Kit (2019)
- Tetris 99 (2019)
- Dr Kawashima's Brain Training for Nintendo Switch (2019)
- Tokyo Mirage Session ♯FE Encore (2020)

Animal Crossing: New Horizons has far exceeded Pokémon Red/Green (8.22m) during the last quarter, likely topping 9 million units LTD. Super Smash Bros. Ultimate and Pokémon Sword/Shield both certainly passed 5m and in all likelihood beat Brain Age 2 (5.10m) to rank #12 and #13. Splatoon 2 and Mario Kart 8 Deluxe should both be around 4.5m, if eShop sales were strong they might even have surpassed Pokémon X/Y (4.56m) which stood at #16.

That's at least five titles that will top 5m on Switch in Japan and then Ring Fit Adventure, Monster Hunter Rise, Tomodachi 3 and Pokémon 9G could also have a shot at it. I guess Minecraft has a very slim chance too, depending on how high its digital sales are, but we will probably never know. Maybe another new IP from Nintendo that becomes a surprise hit like Splatoon and Ring Fit, but that's not something to bet on.

Densha GO! is the better example of myopia by thirds.

Momotaro surpass 2M sales on NSW

Densha Go! have the first week and vanished from top 30 Famitsu. 

As a follow-up to my last post:

Nintendo Switch LTD domestic software shipments as of September 30, 2020 (Nintendo eShop-only titles not included)
First-party > 47.43m units
Total = 84.98m units

First-party was likely around 50 million units when adding all the missing sales, biggest omissions being Brain Training, Mario+Rabbids and 1-2-Switch. This means that first-party titles accounted for ~59% of Nintendo Switch domestic software units sales from March 2017 to September 2020. Each Nintendo Switch owner in Japan bought on average 3 first-party titles and 2 third-party titles. Maybe with the increasing third-party support they will eventually be able to take the majority of units sales? Revenue however will remain as an absolute win for first-party titles, Nintendo games are mostly limited to 30% off deals when they are on sale (i.e. rarely) while other publishers like Level-5 and Capcom have sold tons of units at bargain prices on the Nintendo eShop.

Number of new Nintendo Switch titles* during each fiscal year in Japan
FY16 - 9
FY17 - 74
FY18 - 215
FY19 - 260
FY20 - 118 (6 months left)
Total - 676 (as of September 30, 2020)
* Each title available in both packaged and downloadable versions is counted as one new title.
-> rough average sales units per new title ~ 126k