At least as far as the term is used in gaming, a "drought" implies more than just not getting a certain desired game or series, it's more used to denote a severe shortage of software in general, like say most of Wii U's life, or the twilight years of the Gamecube and Wii.

There was very little for me personally in Switch 1's 2018 for example, but I wouldn't say it was a drought as it did still get plenty of releases I may not have really cared about like Smash Bros Ultimate, Octopath Traveler, Dead Cells, Undertale, Hollow Knight, Dark Souls Remastered, Diablo 3, etc.

Oh that's a good question. I have an unlikely answer.

It's GameCube. Not because of its sales potential — Switch 2 will pass GCN lifetime sales before the year is through — but other things. GCN was the last Nintendo platform to get a lot of third-party "AAA" games during their initial launch window: games like Prince of Persia, Lord of the Rings, Splinter Cell, 007, Tomb Raider, Spider-Man, Medal of Honor, Tony Hawk, Call of Duty, etc. I see this beginning to happen on Switch 2, thanks in large part to Capcom, which, incidentally, was a big Nintendo supporter during the GCN era. Oh, and the Switch 2 box art reminds me a lot of GCN box art. Particularly the spine. Finally, they both have a Kirby Air Rider(s) game

3DS. Sort of overpriced sequel with some unnecessary features but (hopefully) will get some great games

It's sounding like a lot of people don't use Game Chat. It's the feature I scoffed at when announced. That shit is barely going to be used by most people and it eats up RAM space. Nintendo should just outright remove it to free up some RAM space for developers. It's a late to the party dumb idea that Kinect did on 360 and no one cared then when it was more novel. Nintendo is the most amazing company who can be both ahead of the curve at times and astonishingly late at others.

Is $450 really overpriced when the console standard for this gen was $500 to begin with and a base PS5 now costs $650 though?

The Switch 1's original price tag of $300 would cost $400 today adjusted for inflation, not much different from Switch 2.

People forget that consoles are targeting lower socio-economic demographics... The Playstation 5/Pro and Xbox Series X are already priced outside of that now, the Pro especially is really only appealing to more affluent individuals/homes.

In Nintendo's case it's even more sensitive as many households with children, parents will buy a console for each spawn/child for Christmas/Birthdays.
However Nintendo could (And SHOULD!) release cost-sensitive devices to appeal to those individuals with a Switch 2 Lite/Switch 2 TV console.

So yes, while prices remain favorable when accounting for inflation, have wages kept pace? If not, then consoles need to align to wages, not inflation... And that simply hasn't been the case.

Right now one of the cheapest ways to get into gaming is buying something like a cheap Dell Optiplex off ebay for $100 AUD and dropping in a Radeon 6600XT off ebay for $200-$250 AUD. 
And that never used to be the case.

Nintendo needs a value proposition that isn't the preceding Switch Lite... As does Sony.
Microsoft needs to cut the price of the Series S so it's actually cheap, especially if Gamepass can subsidize the hardware.

I would bet that a Switch 2 Lite/etc is almost definitely on the way to combat this very problem.

The thing is though, it's not as simple or easy as just making a device cheap. Inflation, the rising price of components, tariffs, and other factors mean that it just costs more to make this stuff than it did last gen. It sucks, but there's no easy way around it.

Price of components is all relative.
Nintendo is certainly not paying market rates for any of the components in the Switch 2... Especially RAM and NAND.

Conversely... Whilst the Switch 2 is expensive, there are facets where significant price reductions can be had.
Smaller display, smaller battery, ditch the dock, ditch the joycons, smaller SSD... Can probably shave a good $150 AUD or more off the MSRP of the Switch.

Switch 2 TV could take it a step further... Eliminating the display and battery entirely for an even lower price.

Another price reduction would be to move the fabrication node to a more modern, price reduced one... You would also be able to extend battery life at the same time, solving another issue with the Switch 2.

Nintendo could also go in the opposite direction and release a "Premium" Switch 2 which fixes the current consoles shortcomings by having an OLED display, which would increase the average selling price of the Switch 2 consoles, there-by giving them room to subsidize a low-end entry level device.

Nintendo really have a plethora of options to keep sales momentum and hit those price-conscious gamers who feel the current price is simply far to high. (Which is fair. It is high.)

Time will tell what they do, but as a company they aren't afraid to diversify their hardware lineup if the last several handheld generations are a good example.

The price of all consoles need to come down though, absolutely zero doubt about that in my mind... Nintendo is probably the best placed to capitalize and profit off a low cost, low-barrier entry into console gaming whilst Microsoft and Sony keep chasing that premium over-priced, high-affluent market.

If the world was not fucked and the industry was healthy again. PS5 should be like $350 top. Pro $450-500. Switch 2 at $400.

Even if the industry was "healthy" again, you really think Sony would drop the price back to launch prices? I think their price increase is more than just the industry being "unhealthy"