Because you can trade switch game cartridges with your friends.
Name any other gaming platform where you can legally and conveniently share almost all available games with friends.
Name any other gaming platform where you can legally and conveniently share almost all available games with friends.
And even if you do have a physical copy of a given game content for it may require paying for extra DLC. That can't be shared.
I fully expect Nintendo to do away with game cartridges on their next console. They are not consumer friendly.
For multi-device multiplayer, you need multiple copies anyway, so might as well go digital.
Admittedly, this may be a niche concern, but OTOH I don't think Nintendo wants it to be a niche concern, since they're pushing the Switch as both a TV-connected console and a Gameboy replacement.
There's also the matter that you can recover a fair bit of the value of a cartridge by selling it, while you can't do that with digital games, and you can buy physical copies used. Between those, digital is effectively quite a bit more expensive, since they sell them at the same price as physical.
The Deck's wider capabilities (emulators, Minecraft) are also harder to setup and use for kids. The Switch is way more limited but little kids perhaps deal better with a flat "no" than a "maybe, you'll need to work for it".
I think GP's point holds. I'm loving my Deck but my kids are more drawn to their Switch, the Deck intimidates them.