If Nintendo is truly hellbent on keeping NSO, then retro games shouldn't be a part of the service. It's at the point now where the only difference of higher priced tiers of NSO, is what retro consoles are attached to it. At least so far since Nintendo says they'll announce additional details on the Expansion Pack later on. Really if NSO continues to offer what little it does, then it should be free altogether since online multiplayer was literally free for YEARS, and cloud saves should just be a free feature for everyone, but that isn't ever going to happen. 

So I figured since Nintendo is going to stay this course, they should have two separate subscription services: Nintendo Switch Online and Virtual Console Online. Similar to how Xbox has Game Pass and LIVE, or how PlayStation has Now and Plus.

NSO would have to drastically improve in order to justify the $20/year, and if not, drop it to at most $15/year. But port the NES/SNES collections over to VCO along with adding every other major console: NES, SNES, N64, GameCube, and now Genesis lol. As well as handhelds: GB, GBC, and GBA. Idk how DS and 3DS would work since they utilize dual screens, but this would be a great service to have. Nintendo can still utilize online play for some of these games too. 

And with Genesis being added, it opens the door to the Game Gear, Saturn, or Dreamcast! 

As far as pricing goes, Nintendo could easily charge $10/month, but I feel they would probably do $15/month. This would be a win-win! Nintendo would be making an infinite amount of money either from those that want to play Switch games online along with having cloud saves, those who just want to play retro games with online functionality, or what would most likely be most cases, BOTH! And gamers finally get to forever enjoy Nintendo's insane decades long catalog of legendary games.

But VCO continually gets moved over to whatever new hardware platform Nintendo goes to after the Switch's lifecycle, so that way there's always an option to play Nintendo's legacy games. And there wouldn't have to be a start over of Virtual Console games that happened when the Wii moved to the Wii U, or how it's been years for this catalog of retro games to finally come to the Switch.

Just a thought that I had over the way Nintendo has been handling their Online services. Because if Nintendo keeps adding different tiers, it'll start to get confusing after a while when you're having to explain to someone that's interested which retro consoles are in which tier along with whatever small benefits come along with a specific tier lol

Why isn't online free?

So you would happily pay $120 - $180 per year for a collection of old games you don't own?
Over the years that would pile up to $1200 - $1800 in a decade for limited access to old games.

Sorry, but I have already more than enough old games to play for the occasional "retro feeling". Most of my time I play newer games.

Online free, retro game subscription, option to just buy retro games to own. Ideal scenario.

I personally wouldn't keep the VCO subscription going at all times because I'm usually busy playing a brand new game, or having no time at all to play lol. But every so often, I get a hankering to play DKC 2 or LoZ: OoT, so maybe I subscribe for a month or two. But my overall point was for a way of Nintendo giving players the option to play all of their old titles. So many people complain how hard Nintendo makes it to play their old titles without having to pay insane prices nowadays on an old console and physical cartridge/disc or resort to emulation, and if Nintendo doesn't want to use the old Virtual Console where it's a one-and-done purchase, this seems like it could be a better solution.

That would be the dream scenario! 

Nintendo will charge a subscription for classic games for the same reason Sony charges a subscription for online play... because they can.

Luckily I own Wii U with all the classic games I want.

Yeah. This is what I want. Virtual Console games could have a pricing tier like PS Now where it's 9.99 monthly, but 59.99 if you buy it for a year. If Nintendo wants more revenue per subscription, maybe make it 14.99 a month and $79.99 a year. And yes, we should be able to buy some or all of the games. That way people don't have to always be subscribed to play the games or can just buy the few they want a la carte.

I don't get why the OP is describing Nintendo as being "hellbent" on keeping the subscription service. Subscription services are very popular because they are a much better service than having to buy each individual retro game on ever console gen.

Also acting like $20 A YEAR is some huge amount to pay is ridiculous. This ain't $20 a month, it's a year. That's extremely cheap and well worth the cost of what they offer. I get people wanting online play of Switch games to be free, but it's not free on any system so why wouldn't Nintendo make it cost money?? Just because it used to be free doesn't mean they're gonna keep leaving money on the table with it. Online services cost money and now they are covering those with the subscription.

People aren't buying a $200 or $300 system to play retro games alone. So having a retro games only subscription and an online Switch subscription separate doesn't make sense. The average Switch user will be interested in both services. So why complicate the development and the marketing by having two entirely different online subscriptions when they already have one that works?! The Xbox and PS subscription services are different than these so the comparison with them doesn't add up.

The Switch Online works and there is no reason to change it. It's super cheap and now there will be a more complete upgraded version of it that I imagine most people will want. The people who don't play the retro games much and mostly just want to play Switch games online can still keep the SUPER CHEAP $20/year subscription.

I just think it is cool that now that Microsoft has GamePass that Nintendo now has their own GamePast.