It should have VRR and OLED.

VRR itself down to the display controller and the graphics chip... Not the display technology itself.
The Graphics chip supports VRR... And VRR itself shouldn't increase costs much, if at all; as most display controllers are capable of this these days.

The OLED panel itself would absolutely cost more... But that is a price I am personally willing to pay for quality... The mediocre garbage display on the Switch 2 is the absolute biggest disappointment with the console, to the point where I would rather play Metroid Prime 4 on the Switch 1 OLED if I am gaming on the go.

Nintendo could have released the LCD model as it is today... But also augmented the release with a higher priced OLED variant for those of us who want quality, which instead will likely come later anyway.

PC Handhelds are obviously different to the Switch 2...
The Legion Go Gen 2 for example has:
1) 8.8" display. (Switch 2 is 7.9")
2) 32GB of faster Ram. (Switch 2 is 12GB)
3) 512GB/1024GB SSD. (Switch 2 is 256GB)
4) OLED display. (Switch 2 is LCD)
5) 74Wh battery. (Switch 2 is 19.74Wh)
6) 8 Core/16 threads @5Ghz boost (Switch 2 is 8 Cores @ 1.1Ghz)
7) Z2 Extreme running RDNA3.5 beats the Tegra T239 GPU.

So with such a significant jump in specifications with the Legion Go Gen 2.,.. Obviously it's going to cost more, much more, you are getting a vastly superior piece of gaming hardware in every single aspect.

@Pemalite
Yeah, according to DF, due to screen ghosting, that panel's 120Hz is only on "paper"...

I'd pay $2000 for a Switch 2, because I can easily spend that amount, and they could spec up accordingly but the system would have issues obviously selling at even 1/2 that price.

Even as is, $450 is expensive to a lot of people and I think it is impacting the Switch 2 particularly in some Euro markets.

Economy is not great for a lot of people, within the constraints they had I think Nintendo made a very powerful system for the price they had to fit into and even that was probably pushing it.

It's easy to say I want XYZ when it's not your ass on the line during earning seasons and you've missed sales projections and that's now your fault as a president. 

Like the things a lot of people were pushing for like OLED and 16GB standard would make the system $500+ easily right now and if they had done that I think they'd be in a bit of trouble right now. That's simply not within the budget for a sizable chunk of the market. 

I'm happy we got hardware that can run even modern gen games like Assassin's Creed Shadows, a game a lot of people consider to have the best graphics of this gen period. To be able to play a game like that on a portable device like this which can also run Nintendo's games is a home run overall. 

None of the Steam Deck, Lenovo Legion, etc. launched with an OLED screen either, those all came in more expensive variants a couple of years afterwards. 

It's definitely a 120hz panel... But the issue is the lack of LCD overdrive which dumps extra voltage into a pixel in order to get it to change colour faster, which reduces the ghosting and other artifacts.
So it looks more like a poor performing 60hz panel.

Nintendo likely made this poor choice in order to save on power.

In theory Nintendo could issue a firmware update to alleviate this issue... But the ideal approach would be to allow this to be set by the user... As to much overdrive can cause the inverse of ghosting and start showing bright halo artifacts instead, so you need to find a balance... And with the LCD lottery in devices, there won't be a one-size-fits-all fix.

Will it happen? It's Nintendo. They need to make an excuse for people to pay more for an OLED variant later. (I will be one of those suckers unfortunately.)

I see this excuse a lot.
Microsoft has proven you can release multiple console variants with different hardware on day 1. - Nintendo could have released an LCD and OLED console at the same time at different price points and everyone would have been happy.

16GB of Ram would have been good to let the hardware breathe for the next 10 years of game releases, 12GB is definitely on the lower-end, especially as the OS consumes 3GB, leaving just a paltry 9GB for games... 9GB is already a limiting issue, just like on the Series S which only has 8GB available for games.