Nobody cares about graphical power, they just care about fun. The point is to make something other than a traditional console, to offer different ways to play, that can complement the other consoles, if you even want that. Only hard core gamers start caring about these things (luckily many Nintendo first party games do please the hard core gamer while remaining accessible).
Nintendo did make an updated 3DS by the way, the New 3DS. The Switch seems to be taking the Wii U concept much further. And everyone already has a Wii so why make that again. Making something different and unique is a smart way to provide a distinct experience. Making a me-too console will automatically make them a footnote.