Because Iwata hinted at this back in 2014 while the Switch (NX) was still a secret.
Handheld and Home Console Divisions to "Become Like Brothers"
www.nintendolife.com
I think these days, a software ecosystem is more important than new generations fresh starts.
People are used to phones, tablets and other devices these days, and everything is under one ecosystem, no matter the device you are using. Say you are using Android, you get access to all your apps and games on any brand of phone and tablet. Same with iOS; no matter if you have an iPhone 12 or an iPad, you are in the same ecosystem.
Having an ecosystem is more important than a new generation. It makes sense to iterate (but again, Nintendo doesn't always makes sense).