Because they are making all that profit. Same as Netflix, they owe the costumers who are paying them to keep quality up. I'm not saying the games aren't quality (although there has been more misteps away from that Nintendo seal of approval the last few years) just that they can make a higher quality product and modernise. Adding VA for Zelda and not for Link causing cringey mo monologues where there should be dialogue is one foot forward and one foot in the past, that's just one example. They can still make all of the profit, selling millions of copies of games every year without proper regular sales is nonsense while they remain stagnant in all these areas and now put out hardware where the third party games look significantly better than their own software, they even seem to be cutting back on all the cool detail that would help this feel less apparent. They need to look at Astrobot and see how premium that game looks and feels with all the attention to detail and if not meet that at least attempt to meet it now that they are looking for the prices higher than anyone else in the industry. Nintendo are like Atlus, they just don't evolve anything, sometimes regressing in quality (Metaphors ailising and Mario Karts customization for example) and charge at the highest end. Mario oddessy when you go back to the airship, it felt like a mobile phone game. You can give a pass to somethings cause of hardware but now they don't get that pass cause the Switch 2 is clearly far more capable than MKW or DKB even with the formers open world and the latters destruction physics which we had on PS2 with CTR and Red faction decades ago. 

TL;DR. Make product as premium as possible for the cost. 

It sounds as though you would rather Nintendo make games the way that say Sony makes them. The problem is, millions of people prefer Nintendo's approach over the typical AAA way of doing things, and it serves them well by keeping development times in check and avoiding the other pitfalls plaguing the AAA sector.

Sounding like that and then straw manning as if I said that doen't make it true. Choose any high quality, detailed and polished software as an insert from Ori and the will of the whisps up through astrobot to RDR2. Astrobot is just the one that is most similar to Nintendo and they have no reason they can't reach that level of polish. 

Nintendo games are high quality and polished though, in some cases more so than Ori or Astro Bot.

They certainly don't feel new and are loosing the premium feel. Astrobot isn't some technical masterpiece but it feels premium and it fits within the generation without feeling like it could exist on last gen, same for Ravhet and Clank. There is such attention to detail in those games asides from the polish and no, Nintendo games don't feel more polished as Astrobot or Ravhet and Clank. Nintendo are leaning more towards lifeless, empty world and environments and loosing personality fast, where was the personality in Echos of Wisdom, one of the most generic games ever. 

Mafia the Old country releasing at AA pricing of 50. I may have been onto something with this thread. The insane pricing is giving publishers the idea of getting in at these price points, some that look like they could easily get in at 80 like Mafia.