The major loophole in your reasoning is that anybody actually needs to wait software prices to go down on Playstation, when in reality they don't. Most of people don't buy hardware at launch, they buy on the second half of their life. At this point Playstation already has a extensive library with games well behind 30 USD and often getting discounts to be bought for even less than 20. You don't even need to purchase much more than 6 games for Playstation starting be a more compelling option 

I also wonder if you are aware subscription services from Playstation give you free two to three games monthly for only 5 USD a month. I'm talking about AAA games from big publishers, not ports of fifth gen. 

But that's tangential. The reason why Playstation 4 and 5 are the successors of Playstation 1 and 2 lies on its gaming library. The only Japanese third parties that sold more than 2 million copies that aren't present on Playstation ecosystem are: Monster Hunter Rise and Ocopath Travaler

If you like JP games, Playstation is the path. Otherwise buy an Xbox, it's less expensive have Game Pass and get all western third parties as well

The succes of Switch is due to their absurdly strong first party line up that stretches to a point they will have a mind-blowing number of over 20 games selling over 10 million copies 

Your next argument is "Yes, but Nintendo games are JP games too, mostly"

Sure, they are. But one doesn't need to think much to realize Nintendo games were never on Playstation hardware. So whoever wanted to play Nintendo should have bought Nintendo. This was true in the 90s during the peak of Playstation crazy and this is true now. 

My next argument is actually, "What Japanese games are on Switch that weren't on N64 and Gamecube?"

A lot.  You already mentioned MH and Asano games.  There is also Dragon Quest, Atelier, Trails, Valkria Chronicles and a load of other games that used to be Playstation exclusive.  There will soon be Persona and Nier.  On top of that, the most popular musou game is Hyrule Warriors, even though this series started on Playstation.  Xenogears and Xenosaga were on Playstation, but Xenoblade is on Switch.  This is on top of the new Nintendo games that Nintendo has created/acquired since the N64/Gamecube days like Splatoon 3 and Bayonetta and Switch Sports.  This is also on top of games that used to be handheld only like Pokemon and Wario Ware and (mostly) Animal Crossing.  The Switch is the system for Japanese games.  

Switch has all of the big Japanese games and a lot of the small and medium sized ones.  It's also a lot more affordable than the PS5.  Every year Japan releases more Switch games than it did the year before.  The Switch is the affordable system for Japanese games and it also has some Western games.  The PS5 is the high priced system for mostly Western games and also some Japanese games.  It is the Switch that is filling the role that the PS1 and PS2 originally had of being an affordable system of Japanese games and some Western games.

Where is RE VII, RE VIII, FF7R, FF16, FFXIV on Switch? Or those are small Japanese games?

Where is RE VII, RE VIII, FF7R, FF16, FFXIV on Switch? Or those are small Japanese games?

Where is RE VII, RE VIII, FF7R, FF16, FFXIV on Switch? Or those are small Japanese games?