[xp84]

No argument on the latter, but I feel like they also have a 'practical' concern that if they very openly ignored 8-bit and 16-bit 'piracy,' it's conceivable that devices like the Anbernic and Powkiddy ones (that already exist in our timeline) would get sold more in the open and be even easier to get started with. Maybe some parents (say, millennials who want our kids to learn the kind of gaming we grew up on) would rather buy those than a $349 Switch with the $10/month subscription they sell to the selection of 80s and 90s games in Switch Online.

In our timeline of course, those are already easy to get, but those companies cater to the kinds of nerds who flash a new OS to SD cards and download collections of ROMs.

Now, do I think Nintendo actually makes that much money on Switch Online from people who (A) are only there for the retro games and (B) would jump on some "more mainstream" and easier version of retro piracy handheld? Mehhhhhh not really. But someone probably espouses that viewpoint at Nintendo HQ.