I kind of think of it like high end CAD software and such that ships a physical dongle in order to use the software--Nintendo can sell hardware to help ensure it's legitimate use of their emulation software.
Does it work on an M1 Max yet?
That's beside the point. What matters is that Nintendo believes that piracy must be opposed at all costs. It's not about sales, it's not about money, it's not about logic, I don't think it's even about the actual law. It's about attacking piracy, as an end unto itself.
Besides,as another post mentions, Switch piracy is probably very limited. So it doesn't cost much to Nintendo to maintain pressure on piracy.
And after all, even if they don't do it for the law, they can do it thanks to the law. It's their right (and I'm a free software zealot :-)).
Say that this site is user-funded and actually buys a copy for every click. Still think piracy is lost sales?
“What if reality were different in a way that I’ve concocted specifically for the purposes of this discussion?” is a fun game!
That’s a high bar to cross for Nintendo main market which remains families. Plus at this point the Switch is mostly a money printing machine between the old hardware and the store.
Piracy can never be stopped and they waste a lot of effort trying.
They should optimize for being lower friction than privacy, like Steam.
Nintendo are highly focussed on a market where the person making the buying decision isn't the person playing the game.
Buy your 11-year-old son a Switch for Xmas and you know that a) it will work out of the box b) there will be a several family-friendly games with name recognition for any child that age (Mario, Pokemon, Zelda) and c) no one in his class will have a more expensive version or one that works better.
Contrast this with trying to get something to work on a PC with a 'switch emulator dongle'. You have to plug it in yourself, you will end up spending more than you planned in the computer store because each component comes with sucker upgrades, and game choices will be much wider and trickier. Then the game which looks great on your son's friend's machine will play like sh*t and you'll feel guilty for having cheaped out, without necessarily knowing what the operative constraint is.
It’s also worth noting that Nintendo don’t have an issue with emulation per se, several of their commercial products are based on emulation. But I’m every instance where they support emulation it has been looked into their hardware ecosystem and the “emulation” word is never spoken publicly.
Just make PC ports like everyone else, it's free money (compared to risk of making new game) at this point