Switch is getting Gothic and Red Dead Redemption. Switch 2 not having BC would be really really bad!

In terms of the argument on Nintendo phasing out past systems quickly or slowly:

3DS was phased out slowly because they could. 3DS had no successor. Switch consolidated their handheld and console business, but Switch was obviously a successor to the WiiU, not the 3DS. The handheld line simply ended when Switch came out. 3DS could keep being supported because it wasn't replaced, so you had a $300 Switch and a 2DS/3DS in the

Switch succeeded both the Wii U and the 3DS. The 3DS could keep being supported because there was still demand for it, unlike the Wii U. That's all there is to it.

The only unnatural transitions that Nintendo has ever had occured both in the same generation. On the home console side they shorthanded the Wii because they absolutely wanted to leave it behind in favor of the Wii U; software releases for the Wii slowed down in 2011 already and became a trickle in 2012, long before the Wii U launched. On the handheld side they wanted to get rid of the DS because they saw it as their only option to make the 3DS successful after betting the farm on 3D had backfired big time.

All other Nintendo consoles lived on or died quickly after a successor's launch based on the actual market demand for them.

My point is 3DS and Switch had completely different price ranges, therefore they had different markets, and they also had entirely different libraries. Switch was not a successor to the 3DS. This allowed 3DS to keep selling. Switch won't have that luxury when next gen comes out, unless it gets a huge price cut. Nobody is buying a $300 or $350 Switch if backwards compatible Switch 2 costs $350 or a little bit more. So yeah, of course it is market demand, but Switch market demand will dry up to essentially zero as soon as next gen starts unless they have big price cuts on it. Switch didn't do a whole lot to lessen market demand for 3DS because 3DS and Switch are entirely different things - entirely different features, library, and prices.

Functionally speaking, the Switch did function as a successor to the 3DS for a lot of people. Anecdotal, but it was mainly a 3DS successor at the office, and more of a 3DS/Wii successor in my own household - although, to this day I still play Wii games—mainly VC titles like Chrono Trigger, which I replayed very recently.

In my office, we’d play Mario Kart, Monster Hunter, and other games during lunch. This was replaced by Switch’s Mario Kart 8 and Smash Bros Ultimate among other games (there was one called Don’t Starve Together we played a lot last year).

I think they kept the 3DS around because it was much cheaper than the Switch ($300 vs $129-$149) so it could serve the bottom end of the market. There was no Switch Lite to do that yet. Also remember this is in 2015/16 when they had to make decisions on 3DS-Switch relationship, they didn't know at the time that the Switch was guaranteed to be a huge hit, they had to hedge their bets a bit more and not just wipe the 3DS out entirely. Now they should be much more confident in the Switch concept.

Also 3DS games had no compatibility with the Switch, that should be different for Switch 2.

The regular size Switch models are still quite expensive ($300-$350) and so it depends I think on whether Nintendo wants to cut the price on those models or simply push those people to buy a Switch 2 instead for (probably) $400. I suspect that is what they will want. If you're willing to pay $350 for a Switch OLED today, you should just pay the extra $50 to get a Switch 2, which I think isn't unsound logic. Switch Lite will probably be kept around as a cheap option for really young children and budget strapped parents. 

Switch 2 should be backwards compatible so that issue between 3DS and Switch isn't really the same with Switch 2 and Switch 1. In Nintendo's POV, Switch 2 is a Switch 1 too, any sale of Switch 2 over a Switch 1 is a win for Nintendo because they get that consumer locked in not only to the current Switch ecosystem but their software ecosystem for the next 7-8 years.

My guess would be the breakdown will be like this

$399.99 - Switch 2 is going to be the model Nintendo pushes the people buying the OLED/OG Switch models to buy + early adopters. They're going to want both of those crowds to drive rapid install base. 

$299.99 - 1 model of OG Switch (one of OLED or non-OLED will be phased out I think, not sure which one) but available in limited shipments, like PS4. This is basically like Nintendo saying "OK fine, we'd rather you buy a Switch 2, but if you just are going to kick and scream about it, we'll keep a limited supply of OG Switch available). So this will be available as an option I think but in restricted quantities. They're going to try and channel this "I'm willing to spend $300-$350 on the Switch" crowd straight towards a Switch 2 instead. 

$199.99 Switch Lite - Kept around for very young children and budget conscious parents. Basically this model will function like the 3DS did for a few years until a Switch 2 Lite is possible (3nm die shrink I would think), production will depend on demand.

Thinking about it I could see the Switch OLED phased out. The OLED part is more expensive, so they could opt to phase that one out and make a fatter profit margin on the regular Switch and keep it at $299.99. Nintendo did this with the 3DS too, they phased out the New 3DS XL (the best model 3DS) in favor of the New 2DS XL, pretty much because the profit margin was likely better. PS4 Pro is the same thing, you can't really buy a new one, Sony's message on that is basically "look if this is what you want, buy a PS5". 

And I am telling you that your point is bad. Switch succeeded both the Wii U and the 3DS, this shouldn't even be debatable anymore in the year 2023. The rest is just assumptions that Switch won't have more attractive SKUs than right now in combination with a lowballed Switch 2 price. It also ignores that physical copies are lower priced than digital ones which will only hold more true as time goes on. When retailers are selling Switch first party games for around $40 when Switch 2 is out while Switch 2 games cost $60-70, then it's not just a small disparity in hardware prices that speaks for Switch having a continued shelf life.

You also overestimate backwards compatibility which Switch 2 will most likely have. The 3DS was backwards compatible at $250 while the DSi and DSi XL were sold at $150 and $170, respectively, but shit hit the fan for Nintendo because the market was still buying the DS at the same rate as the 3DS, hence the significant price cut for the 3DS several months after its launch. Market demand for Switch dropping to essentially zero is even unrealistic under your outlined conditions. 

Backwards compatibility I think is just differently viewed today than it was 10-12 years ago, especially when it was physical only.

Smartphones again have probably changed consumer behavior and expectation, when you buy a new phone you expect to be able to transfer everything over to the new phone, not just contacts but apps, photos/videos, and software too. Back in the day when you got a new phone, maybe you could transfer like your contact list, but generally getting a new phone was like starting from scratch (and there was a kind of charm to that). I remember having to individually punch in numbers for each of my friends and keeping the old phone around to keep messages.

In the past when backwards compatibility was largely physical software, I think people tended not to use it that much outside of a minority group. Like I used my PS2 to play Final Fantasy IX (PS1 new release at the time) back in the day, but really didn't bother to ever play any other legacy PS1 software on it. Same thing with my 3DS ... I did use it to play DS-era Advance Wars games but I just couldn't be bothered to play any other DS titles. With Wii U/Wii I didn't even bother, loading into the Wii mode was clunky and took too long. Same thing with Wii and GameCube games, I just never really played any GameCube games on it. Itj just felt like a chore to dig out the old games and controllers. 

But digital storefronts/OS just are game changer, it just feels different when you boot up your system and your digital purchases from the previous console are already right there, a click away. The delineation between "this is an old game from the old system" kind of goes away and it becomes like a PC/Steam store where you just have one central library and it doesn't matter if you've bought a new GPU/CPU/entirely new PC.

When you buy a Switch 2, your Switch 1 library (digital) should be right there on the main page and ready to play. Hopefully even enhanced (4K?), though I would guess Nintendo might want a paid patch for that ($10 per game?).

What really changed is that the indie market became so important. Back when it really started in the Wii/PS3/360 era, nobody saw that comming, it was seen just as a cool and interesting niche market. Today, it's not a niche market at all anymore, it's a business defining factor! Basically, what we have now are AAA titels (which are fewer than in the past) and indies, everything in between is either indie (they have a wide price range nowadays) or is perceived as AAA. 

Especially, because the indies are so loved nowadays, there are mainly people who are only or mainly interested in them. For them, the Switch 1 will be good enough for a few years to come and a cheaper alternative for those who just started to get into the indie world. 

Yeah that too, good point. People have a lot more digital content these days. Still I think there was kind of this feeling in the past that when a new system launched, you kinda booted the old system + games off the main TV shelf space (lol) and then once the games were further away you just never bothered to go back to them. This happened with other physical formats too, I'd notice friends once proud VHS collection of movies wouldn't get touched once they got a DVD player, they'd rather even watch a crappier movie on the DVD format than dig through their old VHS tapes. 

Diminishing returns in visuals and blurring of generational lines probably is another factor. In the past it was sort of like "well I've paid $200-$300+ for this new system, I should focus on playing current gen games not outdated "old generation" games. What's the point of buying a new system to play old games on it? But that's not really how I think people view games any more, not to that extent. In the past I think this was a PC centric way of thinking, but now it's part of consoles, something about having the games on an internal storage just feels different for some reason.