Who would buy that? Screen is too small to be of great utility for gaming, cellphones have awful battery life for gaming, controllers wouldn't be as nice to bind to such a device while sticking it in a pocket, and it directly brings it into competition with Apple and Android phone vendors.

I love gaming as much as anyone else, but that makes a lot less sense than what Nintendo is currently doing. The Switch isn't a pocket-sized console, and doesn't pretend to be. It is big and powerful enough to drive a TV-based experience, while being portable enough for trips/public transit.