The Wii (not Wii U but the original Wii) had all of that though. A web browser, multiple on demand services including BBC iPlayer and Netflix, an online store that allowed you to downloadable games direct to the console, etc. So it's not the case that Nintento "can't adapt for the internet age", they clearly did already. This is more a sign that Nintendo don't want the Switch to compete with living room entertainment systems nor general purpose computing tablets.
This actually makes some sense when you consider both of those markets are already saturated. eg most living rooms already have several streamable devices such as:
* other consoles (eg Xbox 360 / P3 and newer),
* XBMC/Kodi devices,
* Amazon Fire Stick and similar,
* or even just a smart TV with that stuff in built.
And who doesn't already have a smart phone and/or tablet?So instead of chasing after saturated markets that exist on the fringe of their business, Nintendo are focusing on their core market.