The arguments are Nintendo doesn't do cutting edge, but developers and Nintendo will move to develop for the best hardware?
The best hardware available to them, yes. Switch is the most powerful handheld. Before you say XB1/PS4, remember that the biggest franchises for 3DS are all handheld focused because in Japan that's what sells. Consoles are dead there. Mobile is actually the biggest market in Japan as well but there are no phones built with gaming in mind (tactile controls). If Capcom/Atlus/Level-5/GameFreak want to release games with higher technical ceiling, they don't have a choice but moving to Switch.