Nintendo has Mario, Zelda, Kirby, Donkey Kong, Starfox, Pokémon, and a few other less super famous and internationally known IP franchises. The core games and their spinoffs make more games than most children can reasonably expected to play through childhood and early adolescence. That the machine then collects dust doesn’t hurt Nintendo because they already sold it.
Yes Steam has huge library (my ‘want to play’ list is over 100 titles at this point) full of games of all genres, qualities, and niches. But Nintendo has more than enough to do what they have done for years, i.e. sit tight on their beloved IP and dole it out at varying levels of quality on strictly low end hardware and watch their earning go up.
Though, to be fair, my kids steal my Steam Deck from me more often than I try to get the Switch from them. The family share features of the Switch leave a lot to be desired.
People rarely buy a platform for the platform, they buy the platform to do the thing they want to do. A game is just a genre of software.
It is far, far better to have tons of high quality software available for a platform, than to have an amazing platform, but a limited choice of software.
Steam does not.